This early exercise by the EOG Resources Call owners was expected by the Covered Calls Advisor since the remaining time value was very close to $0.00, so they elected to purchase the 200 shares at the $93.00 strike price and thus also capture today's $.75 ex-dividend. Despite not capturing today's dividend, this is a good outcome for the Covered Calls Advisor since the resulting +47.0% annualized return-on-investment (aroi) achieved exceeds the +38.6% maximum possible aroi that might have been achieved later on the January 21st options expiration date if the stock remained above the $93.00 strike price.
The transactions and detailed results for this position are as follows:
EOG Resources Inc. (EOG) -- Covered Calls Position Closed by Early Assignment
The buy/write transaction today was as follows:
1/07/2022 Bought 200 EOG Resources Inc. shares @ $97.27
1/07/2022 Sold 2 EOG 1/21/2022 $93.00 Call options @ $4.99 per share.
1/13/2022 Early Assignment of EOG Call options, so the options expired and 200 shares of EOG were sold at the $93.00 strike price.
The overall performance results (including commissions) for this EOG Resources Covered Calls position are as follows:
Covered Calls Cost Basis: $18,457.34
= ($97.27 - $4.99) * 200 shares + $1.34 commissions
Net Profit Components:
(a) Options Income: +$996.66
= ($4.99 * 200 shares) - $1.34 commissions
(b) Dividend Income (EOG options exercised early on the business day prior to the January 13th ex-div date): +$0.00; or
(c) Capital Appreciation: -$854.00
+($93.00 - $97.27) * 200 shares
