January 7th, 2022 Options Expiration Results

Yesterday, the January 7th, 2022 (weekly options expiration date) Covered Calls position in Nucor Corporation (ticker NUE) expired in-the-money, so the 300 Nucor shares were assigned (i.e. sold) at the $107.00 strike price.  As detailed below, the return-on-investment (ROI) result was  +1.7% absolute return (equivalent to +39.6% annualized return-on-investment for the 16 days holding period).

Nucor Corporation (NUE) -- Covered Calls Position Closed Out by Assignment on the Options Expiration Date
The simultaneous buy/write transaction today was as follows:
12/23/2021 Bought 300 Nucor shares @ $112.69
12/23/2021 Sold 3 Nucor 1/07/2022 $107.00 Call options @ $7.03
Note: the Implied Volatility of the Calls was 36.0 when this transaction was executed, well above the S&P 500 Volatility Index (VIX) of 18.3.
12/30/2021 Quarterly ex-dividend of $.50 per share.
1/07/2022 The Nucor Jan. 7th, 2022 $107.00 Covered Calls position closed at expiration in-the-money (the stock price was $114.44), so the 3 NUE options expired and 300 NUE shares were sold at the $107.00 strike price.

The overall performance results (including commissions) for this Nucor Covered Calls position were as follows:
Covered Calls Cost Basis: $31,700.01
= ($112.69 - $7.03) * 300 shares + $2.01 commissions

Net Profit Components:
(a) Options Income: +$2,106.99
= ($7.03 * 300 shares) - $2.01 commissions
(b) Dividend Income (Nucor shares assigned at the Jan. 7th, 2022 options expiration): +$150.00
= ($.50 dividend per share x 300 shares)
(c) Capital Appreciation (Nucor shares assigned at $107.00 strike price at options expiration): -$1,707.00
+($107.00 - $112.69) * 300 shares

Total Net Profit: +$549.99

= (+$2,106.99 options income + $150.00 dividend income - $1,707.00 capital appreciation)

 

Absolute Return-on-Investment: +1.7%

= +$549.99/$31,700.01

Annualized Return-on-Investment: +39.6%

= (+$549.99/$31,700.01) *(365/16 days)