As detailed below, the return-on-investment results for this Airbnb Inc. position was: +6.9% absolute return in 36 days (equivalent to a +70.1% annualized return-on-investment). This Covered Calls position demonstrates the benefit of selling moderately in-the-money Covered Calls in bearish markets. This Airbnb stock price declined by 11% since its original purchase price just over one month ago, however a very attractive return-on-investment result was achieved.
The Buy/Write limit order was executed as follows:
5/16/2022 Bought 200 shares of Airbnb Inc. stock @ $115.68 per share
5/16/2022 Sold 2 ABNB June 17th, 2022 $100.00 Call options @ $19.54 per share
06/17/2022 Two ABNB Calls closed slightly below the $100.00 strike price @ $99.49 per share, so the 2 ABNB Call options expired and 200 Airbnb shares remained in the Covered Calls Advisor Portfolio.
06/21/2022 Closed out this Airbnb Covered Calls position by selling 200 shares @ $102.79 per share.
The overall performance results (including commissions) for this Airbnb Inc. Covered Calls position were as follows:
Stock Purchase Cost Basis: $19,229.34
= ($115.68 - $19.54) * 200 shares + $1.34 commission
Net Profit Components:
(a) Options Income: +$3,906.66
= ($19.54 * 200 shares) - $1.34 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (200 ABNB shares sold at $102.79 per share): -$2,578.00
= (+$102.79 sale price - $115.68 original stock price) * 200 shares
Total Net Profit: +$1,328.66
Absolute Return-on-Investment: +6.9%
= (+$3,906.66 options income +$0.00 dividend income -$2,578.00 capital appreciation)
= +$1,328.66/$19,229.34
Annualized Return-on-Investment: +70.1%
= (+$1,328.66/$19,229.34) * (365/36 days)
Regards and Godspeed,
Jeff Partlow (The Covered Calls Advisor)
partlow@cox.net
