Closed Covered Calls Position in JPMorgan Chase & Co.

Today, the Covered Calls Advisor closed out the existing JPMorgan Chase & Co. (ticker symbol JPM) Covered Calls position. The next quarterly earnings is next Tuesday (which is prior to next Friday's options expiration date) and it was determined that not holding the position on the earnings date was the most prudent decision, so the position was closed out.  This JPM Covered Calls position had 200 shares and two July 17th, 2020 Calls at the $90.00 strike price.  A $.90 ex-dividend on July 2nd was captured and is included in the return-on-investment (roi) results detailed below.  This position demonstrates an occasional advantage of in-the-money Covered Calls positions since despite a stock declined of $3.34 per share, a small positive roi was still achieved.      

The financial result of this JPM Covered Calls position was a +0.7% absolute return-on-investment (equivalent to +17.1% on an annualized basis) for the 14 days this position was held.


JPMorgan Chase & Co. (JPM) -- Covered Calls Position Closed
The buy/write transaction was:
06/24/2020 Bought 200 JPM shares @ $95.81
06/24/2019 Sold 2 JPM 7/17/2020 $90.00 Call options @ $7.45
07/02/2020 Ex-dividend of $.90 per share
07/8/2020  Exited Covered Calls position by selling 200 shares JPM stock @ $92.47 per share and simultaneously buying-to-close 2 July 17th, 2020 $90.00 Call options at $4.43 per share.




The overall performance result (including commissions) for this JPM Covered Calls position was as follows:
Stock Purchase Cost: $17,673.34
= ($95.81 - $7.45) *200 shares + $1.34 commission

Net Profit:
(a) Options Income (Bought-to-Close 2 Call options at $4.43 per share): +$604.00
= ($7.45 - $4.43) *200 shares)

(b) Dividend Income (Ex-dividend of $.90 per share on July 2nd received): +$180.00
= ($.90 dividend per share x 200 shares)

(c) Capital Appreciation (JPM shares sold at $92.47 per share): -$668.00
+($92.47-$95.81) * 200 shares

Total Net Profit: +$116.00

= (+$604.00 options income +$180.00 dividend income -$668.00 capital appreciation)

Absolute Return: +0.7%

= +$116.00/$17,673.34

Annualized Return (If JPM assigned at $90.00 at July, 17th 2020 expiration): +17.1%

= (+$116.00/$17,673.34)*(365/14 days)