Lowe's Companies Inc. (LOW) -- New Covered Calls Position
The buy/write transaction was:
01/13/2021 Bought 200 Lowe's Companies Inc. shares @ $169.86
01/13/2021 Sold 2 Lowe's 01/29/2021 $165.00 Call options @ $6.34
Note: Implied Volatility (IV) of the Call options was at 22.8 when this position was transacted.
01/19/2021 Quarterly ex-dividend of $.60 per share
01/29/2021 Today's $165.00 Call options expired in-the-money (stock closed at $166.85 per share), so the 200 LOW shares were assigned (i.e. sold) at the $165.00 strike price.
The overall performance result (including commissions) for this Lowe's Companies Inc. Covered Calls position was as follows:
Covered Calls Cost Basis: $32,705.34
= ($169.86 - $6.34) * 200 shares + $1.34 commission
Net Profit Components:
(a) Options Income: +$1,268.00
= ($6.34 * 200 shares)
(b) Dividend Income (Lowe's stock assigned at Jan. 29th, 2021 options expiration): +$120.00
= ($.60 dividend per share x 200 shares)
(c) Capital Appreciation (200 shares assigned at $165.00 strike price at options expiration): -$972.00
+($165.00 - $169.86) * 200 shares
Total Net Profit (Lowe's shares assigned at $165.00 at January 29th, 2021 expiration): +$416.00
= (+$1,268.00 +$120.00 -$972.00)
