Roll Up-and-Out Lennar Corp. Covered Calls

When Lennar Corp. (ticker symbol LEN) shares were trading at $94.85 this afternoon and the existing Covered Calls position was for February 19th, 2021 at the $77.50 strike price, the two Call options were bought-to-close at $17.45 per share.  They were relatively deep-in-the-money and had only $.10 time value remaining, so the Covered Calls Advisor decided to roll-up-and-out to the March 5th, 2021 $85.00 Calls at $10.75 per share.   This remains a conservative in-the-money position since the Delta for these new Calls when this rollout transaction was executed was 83.9 which closely approximates the probability of assignment at options expiration (i.e. 83.9% probability).  The transaction history and potential result detailed below includes the ex-dividend that occurred on January 28th, 2021 of $.25 per share. As preferred by the Covered Calls Advisor, there is no quarterly earnings report for Lennar prior to the March 5th, 2021 options expiration date.

As detailed below, a potential return-on-investment result for this Lennar Corp position is +4.8% absolute return in 52 days (equivalent to a +33.5% annualized return-on-investment) if the stock closes above the $85.00 strike price at the March 5th options expiration.

Lennar Corp. (LEN) -- Continuation of Covered Calls Position
The buy/write transaction was:
01/13/2021 Bought 200 Lennar Corp. shares @ $76.39
01/13/2021 Sold 2 LEN 01/29/2021 $72.50 Call options @ $4.96
Note: the Implied Volatility of the Call options was 37.5 when this position was transacted and the Delta (approximately the probability of assignment at expiration) was 73.3.
01/20/2021 Roll-Up-and-Out transaction: Bought-to-Close 2 LEN Jan. 29th, 2021 $72.50 Call options at $11.18 per share and simultaneously Sold-to-Open 2 LEN February 19th, 2021 $77.50 Calls at $7.50 per share. This roll-up-and-out transaction occurred at a net debit of $3.68 ($11.18 - $7.50) per share and the price of Lennar's stock was $83.58 when this transaction was executed.
01/28/2021 Quarterly ex-dividend of $.25 per share
02/08/2021 Roll-Up-and-Out transaction: Bought-to-Close 2 LEN Feb. 19th, 2021 $77.50 Call options at $17.45 per share and simultaneously Sold-to-Open 2 LEN March 5th, 2021 $85.00 Calls at $10.75 per share. This roll-up-and-out transaction occurred at a net debit of $6.70 ($10.75 - $17.45) per share and the price of Lennar's stock was $94.85 when this transaction was executed.

A potential overall performance result (including commissions) for this Lennar Corp. Covered Calls position is as follows:
Covered Calls Cost Basis: $14,287.34
= ($76.39 - $4.96) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: -$1,089.36
= ($4.96 -$11.18 + $7.50 -$17.45 +$10.75) * 200 shares - $5.36 commissions
(b) Dividend Income (If Lennar stock assigned at the March 5th, 2021 options expiration): +$50.00
= ($.25 dividend per share x 200 shares)

(c) Capital Appreciation (If shares assigned at $85.00 strike price at options expiration): +1,722.00
+($85.00 - $76.39) * 200 shares

Total Net Profit (If Lennar shares assigned at $85.00 at March 5th, 2021 expiration): +$682.64

= (-$1,089.36 +$50.00 +$1,722.00)

Absolute Return (If Lennar shares assigned on March 5th options expiration date): +4.8%

= +$682.64/$14,287.34

Annualized Return-on-Investment: +33.5%

= (+$682.64/$14,287.34)*(365/52 days)