The details of this transaction are shown below in the same format as is normally used to show the transactions and financial results from Covered Calls positions when they are closed out.
Citigroup Inc.(C) -- Covered Calls Position Closed by Early Assignment
The transactions were as follows:
07/30/2020 Bought 400 shares of Citigroup @ $50.20 per share
07/30/2020 Sold 4 Citigroup August 7th, 2020 $48.50 Call options @ $1.94 per share
Note: the Implied Volatility of the Call option was 27.7
07/31/2020 Early exercise of 4 Citi August 7th, 2020 $48.50 Call options, so 400 Citigroup shares were assigned (i.e. sold) at the $48.50 strike price.
The financial performance result (including commissions) was as follows:
Covered Calls Cost Basis: $19,306.68
= ($50.20 - $1.94) * 400 shares + $2.68 commission
Net Profit Components:
(a) Options Income: +$776.00
= ($1.94 * 400 shares)
(b) Dividend Income: +$0.00
(c) Capital Appreciation: -$680.00
= ($48.50 -$50.20) * 400 shares
Total Net Profit: +$93.32
= (+$776.00 options income +$0.00 dividend income -$680.00 capital appreciation) - $2.68 commission
Absolute Return: +0.48%
= +$93.32/$19,306.68
Equivalent Annualized Return: +176.4%
= (+$93.32/$19,306.68)*(365/1 day)
