Rolled-Up Covered Calls in Abercrombie & Fitch Co.

On October 20th, 2021 the Covered Calls Advisor established a Covered Calls position in Abercrombie & Fitch Co. (ticker ANF) at the November 19th, 2021 $43.00 strike price.  The price of the 300 ANF shares has increased from the purchase price of $38.07 to $45.63 this morning.   I decided to roll up from the $35.00 strike price to the $43.00 strike and at the same November 19th, 2021 options expiration date.  A vertical debit spread transaction was executed at a net debit of $7.40 ($10.80 - $3.40) per share -- so $.60 time value per share ($43.00 new strike price - $35.00 old strike price - $7.40 net debit) was added to the Covered Calls position profit potential.  The price of Abercrombie & Fitch stock was $45.63 when this roll-up transaction was executed and the Delta of the $43.00 Call options was 77.1 which was close to the 73.7 Delta for the original Covered Calls position when it was established.

A potential return-on-investment result for this Abercrombie & Fitch Co. Covered Calls position is now +4.5% absolute return in 31 days (equivalent to a +53.1% annualized return-on-investment) if the stock price closes above the $43.00 strike price on the November 19th options expiration date. 
By rolling up the original Covered Calls, if assigned on the Nov. 19th expiration date, this result would exceed the +2.8% absolute return (+32.6% annualized) that was the maximum potential roi of the original Covered Calls position at the $35.00 strike price.  

Abercrombie & Fitch Co. (ANF) -- Covered Calls Position Rolled-Up

The Buy/Write limit order was executed as follows:
10/20/2021 Bought 300 shares of Abercrombie & Fitch Co. stock @ $38.07 per share 
10/20/2021 Sold 3 A&F November 19th, 2021 $35.00 Call options @ $4.02 per share
11/09/2021 Rolled-Up the ANF Covered Calls position by the following debit spread transaction:  Simultaneously Bought-to-Close the three Nov. 19th $35.00 Calls @ $10.80 per share and Sold-to-Open three Nov. 19th $43.00 Calls @ $3.40 per share. 

A possible overall performance result (including commissions) for this rolled-up Abercrombie & Fitch Co. Covered Calls position is as follows:
Stock Purchase Cost: $10,217.01
= ($38.07 - $4.02) *300 shares + $2.01 commission

Net Profit:
(a) Options Income: -$1,018.02
= ($4.02 - $10.80 + $3.40) *300 shares - $4.02 commission
(b) Dividend Income: +$0.00

(c) Capital Appreciation (If 300 ANF shares assigned at $43.00 strike price at expiration): +1,479.00
+($43.00 -$38.07) * 300 shares

Total Net Profit (If 300 Abercrombie shares assigned at $43.00 strike price at expiration): 

+$460.98

= (-$1,018.02 options income +$0.00 dividend income +$1,479.00 capital appreciation)

 

Absolute Return-on-Investment: +4.5%

= +$460.98/$10,217.01

Annualized Return-on-Investment: +53.1%

= (+$460.98/$10,217.01) * (365/31 days)