Covered Calls Established in Energy Select Sector SPDR Fund ETF

A Covered Calls position was established in the Energy Select Sector SPDR Fund ETF (ticker XLE), with a December 31st, 2021 options expiration date. Three hundred shares of the Energy Select Sector SPDR Fund were purchased at $54.81 and three Call options were sold at $1.72 per share at the $53.50 strike price.  

The time value was $.41 per share [$53.50 strike price - ($54.81 share price - $1.72 options premium)] when this buy/write limit order transaction was executed.  XLE also goes ex-distribution on December 20th, 2021with a regular quarterly dividend of $.695 per share which is included in the potential return-on-investment result which is: +2.1% absolute return (equivalent to +50.9% annualized return-on-investment over the next 15 days) if the stock is assigned on the December 31st, 2021 options expiration date.  

The Delta was 70.1 when this position was established, which is the approximate probability that it will close in-the-money on the options expiration date.

Energy Select Sector SPDR Fund ETF (XLE) -- New Covered Calls Position
The buy/write transaction was as follows:
12/17/2021 Bought 300 shares of the Energy Select Sector SPDR Fund @ $54.81 per share 
9/17/2021 Sold 3 XLE Dec. 31st, 2021 $53.50 Call options @ $1.72 per share
Note: the Implied Volatility of these Call options was 21.8 when this position was established.
12/20/2021 Ex-distribution of $.695 per share
 

A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $15,929.01 = ($54.81 - $1.72) * 300 shares + $2.01 commission

Net Profit Components:
(a) Options Income: +$518.01
= ($1.72 * 300 shares) - $2.01 commissions
(b) Dividend Income (If XLE shares assigned at Dec. 31st, 2021 options expiration): +$208.50
= ($.695 dividend per share x 300 shares)
(c) Capital Appreciation (If XLE shares assigned at $53.50.00 strike price at options expiration): -$393.00
= +($53.50 - $54.81) * 300 shares

Total Net Profit (If XLE shares assigned at $53.50 strike price at Dec. 31st, 2021 expiration): +$333.51

= (+$518.01 + $208.50 - $393.00)
 

Absolute Return-on-Investment (If XLE shares assigned at $53.50 strike price on Dec. 31st, 2021 options expiration date): +2.1%

= +$333.51/$15,929.01

Annualized Return-on-Investment (If XLE shares assigned at $53.50 strike at Dec. 31st, 2021 options expiration): +50.9%

= (+$333.51/$15,929.01) *(365/15 days)

These returns will be achieved as long as the stock is above the $53.50 strike price at assignment.  If the stock declines below the strike price, the breakeven price of $52.395 ($54.81 -$1.72 -$.695) provides 4.4% downside protection below today's purchase price.