Roll-Out Covered Calls Position in Devon Energy Corporation

The Covered Calls Advisor Portfolio had a Covered Calls position in Devon Energy Corp. (DVN) that had an expiration date today at the $43.00 strike price.  Today with less than ten minutes remaining before the market close, the Covered Calls position was out-of-the-money and I decided to roll-out the position one week to December 31st, 2021 at the same $43.00 strike price.  A credit spread transaction was executed by simultaneously buying-to-close 3 Dec. 23rd, 2021 $43.00 Calls @ $.01 per share and selling-to-open 3 Dec. 31st, 2021 $43.00 Calls @ $.71 per share--a net credit of $.70 per share when the stock was trading at $42.31 per share.   

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

•  +4.4% absolute return (equivalent to +36.2% annualized return over a period of 44 days) if the Devon Energy stock price is unchanged from today's price of $42.31 on the December 31st, 2021 options expiration date; OR 

• +6.2% absolute return (equivalent to +51.1% annualized return over 44 days) if the stock is in-the-money and therefore assigned at the $43.00 strike price on the Dec. 31st options expiration date.
  

Devon Energy Corp. (DVN) -- Covered Calls Position Rolled-Out
The net debit limit order buy/write transaction was as follows:
11/18/2021 Bought 300 Devon Energy shares @ $42.08
11/18/2021 Sold 3 Devon 12/17/2021 $39.00 Call options @ $3.80   Note: the Implied Volatility of these Call options was 45.6 when this position was established and their Bid/Ask spread was $3.75/$3.90.
12/08/2021 Rolled-Up-and-Out: Bought-to-Close the 12/17 $39.00 Calls for $6.29 and simultaneously Sold-to-Open the 12/23 $43.00 Calls at $2.59.
12/09/2021 Quarterly ex-dividends totaling $.84 per share
12/23/2021 Bought-to-Close 3 DVN Dec. 23rd, 2021 $43.00 Call Options @ $.01 per share and simultaneously Sold-to-Open 3 DVN Dec. 31st, 2021 $43.00 Calls @ $.71 per share.

Two potential overall performance results (including commissions) for this Devon Energy Covered Calls position is as follows:
Covered Calls Cost Basis: $11,486.01
= ($42.08 - $3.80) * 300 shares + $2.01 commissions

Net Profit Components:
(a) Options Income: +$179.70
= ($3.80 - $6.29 + $2.59 -$.01 +$.71) * 300 shares - $6.03 commissions
(b) Dividend Income (If Devon share price is unchanged at $42.31 at the Dec.31st, 2021 options expiration): +$252.00
= ($.84 total in dividends per share x 300 shares)
(c) Capital Appreciation (If Devon share price unchanged at $42.31 strike price at 12/31/2021 options expiration): +$69.00
+($42.31 - $42.08) * 300 shares; OR
(c) Capital Appreciation (If Devon shares are in-the-money and therefore assigned at the $43.00 strike price in the 12/31/2021 options expiration): +$276.00
+($43.00 - $42.08) * 300 shares

(a) Total Net Profit (If Devon Energy stock price is unchanged at $42.31at the Dec. 31st, 2021 options expiration date): +$500.70
= (+$179.70 Call options income +$252.00 dividend income +$69.00 capital appreciation); OR
(b) Total Net Profit (If Devon stock price closes above the $43.00 strike price and is assigned at the Dec. 31st, 2021 options expiration date): +$707.70
= (+$179.70 Call options income +$252.00 dividend income +$276.00 capital appreciation)

1. Absolute Return-on-Investment (If Devon Energy stock price is unchanged at $42.31 at the 12/31/2021 options expiration date): +4.4%
= +$500.70/$11,486.01
Equivalent Annualized Return-on-Investment: +36.2%
= (+$500.70/$11,486.01)*(365/44 days); OR
2. Absolute Return-on-Investment (If DVN stock price closes above the $43.00 strike price and is assigned at the Dec. 31st, 2021 options expiration date): +6.2%
= +$707.70/$11,486.01
Equivalent Annualized Return-on-Investment: +51.1%
= (+$707.70/$11,486.01)*(365/44 days)