Covered Calls Established in Uber Technologies Inc.

At 11:05am this morning, a Covered Calls position was established by buying 500 shares of Uber Technologies Inc.(ticker symbol UBER) stock at $39.26 and simultaneously selling 5 December 17th, 2021 $37.50 Call options at $2.80 per share -- a net debit of $36.46 per share -- so the time value was $1.04 per share [$2.80 Call options premium - ($39.26 stock purchase price - $37.50 strike price)]. The Implied Volatility of these Call options was very high at 48.6 when this position was established.  This elevated IV level is especially true given that the Q3 2021 earnings have already been reported, so there is no increased Implied Volatility because of an upcoming earnings report.  Given the Covered Calls Advisor's current Overall Market Meter sentiment of Slightly Bearish, a moderately in-the-money position was established.  The Delta of these Call options was 67.9 which approximates the probability that this Covered Calls position will be in-the-money and therefore assigned on the Dec. 17th options expiration date.  

According to Reuters Research, the average current target price is $68.01 (+73.2% above today's purchase price) for the forty analysts now covering Uber.  Their estimated 2021 revenue is +38.2% above the prior year and next year's estimates are +47.1% above this year's.

As detailed below, a potential outcome for this Uber Technologies investment is +2.8% absolute return-on-investment for the next 19 days (equivalent to +54.4% on an annualized return basis) if the stock closes above the $37.50 strike price on the December 17th options expiration date.

Uber Technologies Inc. (UBER) -- New Covered Calls Position

The net debit buy/write limit order was executed as follows:
11/29/2021 Bought 500 shares of Uber Technologies Inc. stock @ $39.26 per share 
11/29/2021 Sold 5 Uber Dec. 17th, 2021 $37.50 Call options @ $2.80 per share
Note: this was a simultaneous Buy/Write transaction

A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $18,233.35
= ($39.26 - $2.80) * 500 shares + $3.35 commission

Net Profit Components:
(a) Options Income: +$1,396.65
= ($2.80 * 500 shares) - $3.35 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If Uber stock is above the $37.50 strike price at the Dec. 17th expiration): -$880.00
= ($37.50 -$39.26) * 500 shares

Potential Total Net Profit (If assigned at expiration): +$516.65
= (+$1,396.65 options income +$0.00 dividend income -$880.00 capital appreciation)

Absolute Return: +2.8%
= +$516.65/$18,233.35
Equivalent Annualized Return: +54.4%
= (+$516.65/$18,233.35)*(365/19 days)

The downside 'breakeven price' at expiration is at $36.46 ($39.26 - $2.80), which is 7.1% below the current market price of $39.26.  This is good protection given the high +54.4% potential annualized ROI for this investment.