Established Covered Calls Position in Blackstone Inc.

This afternoon, a Covered Calls position was established in Blackstone Inc. (ticker symbol BX) with the purchase of 200 shares at $112.97 per share and two May 20th, 2022 Call options were sold for $9.65 per share at the $105.00 strike price.  The Extrinsic Value (aka Time Value) of the Call options when this position was established was $1.68 per share = [$9.65 options premium - ($112.97 stock price - $105.00 strike price)] per share.  Given the Covered Calls Advisor's currently cautious Overall Market Meter sentiment, a moderately in-the-money Covered Calls positions was established.  The Delta of the Calls was 74.6 when this buy/write transaction was executed which approximates the probability of assignment on the May 20th, 2022 options expiration date.   

Blackstone is a very large $145 billion market-cap alternative assets management company. They currently have $915 billion assets under management primarily in private equity, real estate, hedge funds, and credit markets. Their quarterly earnings report was issued this morning and they beat analysts' estimates for both revenue and earnings, although both were below the results for the same quarter last year. They also declared a quarterly dividend of $1.32 (4.7% annual dividend yield) with an ex-dividend date of April 29th, 2022 and this dividend is included in the potential return-on-investment results presented below.

Two potential return-on-investment results for this Blackstone Inc. Covered Calls position are: (a) +1.6% absolute return (equivalent to +74.2% annualized return for the next 8 days) if the stock is assigned early [on the last trading day prior to the ex-dividend date]; OR (b) +2.9% absolute return (equivalent to +35.3% annualized return over the next 30 days) if the stock is assigned on the May 20th, 2022 monthly options expiration date. 

Blackstone Inc. (BX) -- New Covered Calls Position
The transactions were:
4/21/2022 Bought 200 Blackstone Inc. shares @ $112.97
4/21/2022 Sold 2 BX 5/20/2022 $105.00 Call options @ $9.65 per share.
Note: the Implied Volatility of these Call options was 39.5 when this position was established.
4/29/2022 Upcoming quarterly ex-dividend of $1.32 per share

Two possible overall performance results (including commissions) for this
Blackstone Inc. Covered Calls position are as follows:
Covered Calls Cost Basis: $20,665.34
= ($112.97 - $9.65) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$1,930.00
= ($9.65 * 200 shares)
(b) Dividend Income (If option exercised early on the business day prior to the ex-div date): +$0.00; or
(b) Dividend Income (If BX shares assigned on the May 20th, 2022 options expiration date): +$264.00
= ($1.32 dividend per share x 200 shares)
(c) Capital Appreciation (If Blackstone shares assigned early): -$1,594.00
+($105.00 strike price - $112.97 stock purchase cost) * 200 shares; or
(c) Capital Appreciation (If Blackstone shares assigned at $105.00 strike price at options expiration): -$1,594.00
+($105.00- $112.97) * 200 shares

1. Total Net Profit [If option exercised on April 28th, 2022 (last business day prior to the April 29th ex-dividend date)]: +$336.00

= (+$1,930.00 options income +$0.00 dividend income -$1,594.00 capital appreciation); or

2. Total Net Profit (If Blackstone shares assigned at $105.00 at May 20th, 2022 options expiration): +$600.00

= (+$1,930.00 options income +$264.00 dividend income -$1,594.00 capital appreciation)

1. Absolute Return-on-Investment (If Blackstone options exercised early on the business day prior to the expiration date): +1.6%

= +$336.00/$20,665.34

Annualized Return-on-Investment (If option exercised early): +74.2%

= (+$336.00/$20,665.34) * (365/8 days); or

2. Absolute Return-on-Investment (If Blackstone shares assigned at $105.00 strike price at the May 20th, 2022 expiration): +2.9%

= +$600.00/$20,665.34

Annualized Return (If Blackstone stock assigned at $105.00 at May 20th expiration): +35.3%

= (+$600.00/$20,665.34) * (365/30 days)

Early assignment is unlikely, but either outcome would provide an attractive return-on-investment result.  These returns will be achieved as long as the stock is above the $105.00 strike price at assignment.  If the stock declines below the strike price, the breakeven price of $102.00 ($112.97 -$9.65 -$1.32) provides 9.7% downside protection below today's purchase price.

At least eight of the nine metrics used in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet (see below) must be 'YES' prior to establishing a new Covered Calls position using the Covered Calls Advisor's Dividend Capture strategy.  As shown in the chart below, all nine criteria are achieved for this Blackstone Inc. Covered Calls position.