The Covered Calls Advisor Portfolio originally had a 1,000 shares Covered Calls position in Bank of America Corp. (BAC). 700 shares were assigned early on March 4th (the day prior to the ex-dividend date) -- see detailed results here: link
The remaining 300 shares of BAC Covered Calls remained in the portfolio until yesterday's March 12th, 2021 options expiration date when the stock finished in-the-money. So, the Call options expired and the 300 remaining shares were assigned (i.e. sold) at their $34.00 strike price. As detailed below, the return-on-investment (ROI) result was +1.5% absolute return (equivalent to +36.1% annualized return-on-investment for the 15 days holding period).
Bank of America Corp. (BAC) -- Covered Calls Position Assigned at Options Expiration Date
The buy/write transaction was as follows:
02/26/2021 Bought 300 shares of Bank of America Corp. stock @ $35.48 per share
02/26/2021 Sold 3 BAC March 12th, 2021 $34.00 Call options @ $1.80 per share
Note: The Open Interest in these Calls was 850 contracts and the Implied Volatility was 30.6
03/04/2021 Ex-dividend of $.18 per share
03/12/2021 Today's $34.00 Call options expired in-the-money (stock closed at $37.94 per share), so the 300 BAC shares were assigned (i.e. sold) at the $34.00 strike price.
The overall performance results (including commissions) was as follows:
Covered Calls Cost Basis: $10,106.01
= ($35.48 - $1.80) * 300 shares + $2.01 commission
Net Profit Components:
(a) Options Income: +$540.00
= ($1.80 * 300 shares)
(b) Dividend Income (BAC shares assigned at 3/12/2021 options expiration): +$54.00
= $.18 per share x 300 shares
(c) Capital Appreciation (Shares above $34.00 strike price at March 12th options expiration): -$444.00
= ($34.00 -$35.48) * 300 shares
Net Profit: +$150.00
= (+$540.00 options income +$54.00 dividend income -$444.00 capital appreciation)
Absolute Return: +1.5%
= +$150.00/$10,106.01
Equivalent Annualized Return: +36.1%
= (+$150.00/$10,106.01)*(365/15 days)
