Roll Down-and-Out to Continue Covered Calls Position in Discover Financial Services

Today, the Covered Calls position containing 200 shares of Discover Financial Services (DFS) stock was rolled down-and-out from the December 3rd, 2021 $114.00 strike price to the December 17th, 2021 $112.00 strike price.  The stock price had declined from the original purchase price of $118.03 per share to $108.67 at last Friday's market close, so the two Dec. 3rd $114.00 Call options expired out-of-the-money.  The Covered Calls Advisor attributes the stock price decline primarily to the decline of the 10-to-2-Year Treasury Yield Spread from about 1.0% to .75% currently.  I believe this Yield Spread is near a bottom and will soon rebound and the stock price will bounce back in response as well.  So, I decided to continue this Covered Calls position shortly after market open this morning by selling two December 17th, 2021 Calls at the $112.00 strike price against the 200 Discover shares owned.  The stock price was higher this morning at about $110.84 when the two DFS Call options were sold at $3.06 per share.

As detailed below, two potential return-on-investment results are: 

•  +1.3% absolute return (equivalent to +15.2% annualized return for the 32 days from the November 15th, 2021 date of origin until the Dec. 17th, 2021 options expiration) if the stock price is unchanged from today's price of $110.84; OR 

• +2.6% absolute return (equivalent to +29.2% annualized return over the 32 days period of this Covered Calls investment) if Discover stock is assigned at the $112.00 strike price on the December 17th, 2021 options expiration date.

Discover Financial Services (DFS) -- Rolled Down and Out Covered Calls Position
The buy/write transaction was as follows:
11/15/2021 Bought 200 shares of Discover Financial Services @ $118.03 per share 
11/15/2021 Sold 2 DFS Dec. 3rd, 2021 $114.00 Call options @ $5.37 per share
11/23/2021 Ex-dividend of $.50 per share
12/03/2021 Two DFS $114.00 Call options expired out-of-the-money, so 200 Discover shares remain in the Covered Calls Advisor Portfolio.
12/06/2021 Sold-to-Open 2 DFS $112.00 Calls @ $3.06 per share.
Note: the stock price was $110.84 at market close last Friday and approximately $110.84 shortly after the market open today when the two 12/17/2021 $112.00 Call options were sold to continue the Covered Calls position.

Two possible overall performance results (including commissions) would be as follows:
Covered Calls Cost Basis: $22,533.34
= ($118.03 - $5.37) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$1,683.32
= ($5.37 + $3.06) * 200 shares - $2.68 commissions
(b) Dividend Income: +$100.00 = ($.50 per share dividend x 200 shares) 
(c) Capital Appreciation (If Discover stock price is unchanged at $110.84 at the December 17th, 2021 options expiration date): -$1,438.00
= ($110.84 -$118.03) * 200 shares; OR
(c) Capital Appreciation (If Discover stock price closes above the $112.00 strike price and is assigned at the December 17th, 2021 options expiration date): -$1,206.00
= ($112.00 -$118.03) * 200 shares

(a) Total Net Profit (If Discover stock price is unchanged at $110.84 at the December 17th, 2021 options expiration date): +300.32
= (+$1,683.32 Call options income +$100.00 dividend income -$1,438.00 capital appreciation); OR
(b) Total Net Profit (If DFS stock price closes above the $112.00 strike price and is assigned at the December 17th, 2021 options expiration date): +$577.32
= (+$1,683.32 Call options income +$100.00 dividend income -$1,206.00 capital appreciation)

1. Absolute Return-on-Investment (If Discover Financial stock price is unchanged at $110.84 at the Dec. 17th, 2021 options expiration date): +1.3%
= +$300.32/$22,533.34
Equivalent Annualized Return-on-Investment: +15.2%
= (+$300.32/$22,533.34)*(365/32 days); OR
2. Absolute Return-on-Investment (If Discover stock price closes above the $112.00 strike price and is assigned at the December 17th, 2021 options expiration date): +2.6%
= +$577.32/$22,533.34
Equivalent Annualized Return-on-Investment: +29.2%
= (+$577.32/$22,533.34)*(365/32 days)