For Cigna Corporation, one July 15th, 2022 $250.00 Call option was sold at $6.60 per share against the 100 shares owned in the Covered Calls Advisor Portfolio when the stock price was $247.00. For Micron, five July 15th, 2022 $60.00 Call options were sold at $2.06 per share against the 500 Micron shares owned when the stock price was $57.20. The details of these Covered Calls positions so far are provided below including potential return-on-investment results.
1. Cigna Corporation (CI) -- Covered Call Position Continued
The buy/write transaction today was as follows:
5/31/2022 Bought 100 Cigna Corp. shares @ $271.73
5/31/2022 Sold 1 Cigna 6/17/2022 $260.00 Call option @ $14.19
6/07/2022 Upcoming quarterly ex-dividend of $1.12 per share
6/17/2022 One Cigna $260.00 Call options expired out-of-the-money and 100 shares remain in the Covered Calls Advisor Portfolio
6/21/2022 Continued Cigna Covered Call position by selling one July 15th, 2022 $250.00 Call option @ $6.60 per share. The stock price was $247.00 when this transaction was executed. The option's Implied Volatility was 29.9 and the Delta was 45.8.
A possible overall performance result (including commissions) for this Cigna Covered Call position are as follows:
Covered Call Cost Basis: $25,754.67
= ($271.73 - $14.19) * 100 shares + $.67 commissions
Net Profit Components:
(a) Options Income: +$2,077.66
= ($14.19 + $6.60) * 100 shares - $1.34 commissions
(b) Dividend Income (Cigna went ex-dividend on 6/7/2022 at $1.12 per share): +$112.00
= ($1.12 dividend per share x 100 shares)
(c) Capital Appreciation (If Cigna shares assigned at $250.00 strike price at the July 15th, 2022 options expiration): -$2,173.00
+($250.00 - $271.73) * 100 shares
2. Micron Technology Inc. (MU) -- Covered Calls Position Continued
The original transaction was as follows:
03/31/2022 Sold 5 Micron April 14th, 2022 $72.50 100% Cash-Secured Put options @ $.92 per share.
04/14/2022 5 Micron $72.50 Puts expired in-the-money (stock price below the strike price), so 500 shares were purchased at $72.50 in the Covered Calls Advisor Portfolio
04/18/2022 Continued Micron position by selling 5 May 6th, 2022 $73.00 Call options @ $2.28 per share against the 500 Micron shares owned to establish a Micron Covered Calls position. The Implied Volatility of these Calls was 43.4 and the Delta was 44.5 when these Calls were sold.
05/06/2022 Five Micron $73.00 Call options expired out-of-the-money, so 500 MU shares remain in the Covered Calls Advisor Portfolio.
05/09/2022 Continued Micron position by selling 5 May 20th, 2022 $72.50 Call options @ $2.02 per share against the 500 Micron shares owned.
5/20/2022 Five Micron Call options expired out-of-the-money. The stock price was $68.90 at options expiration last Friday.
05/23/2022 Sold 5 Micron 6/03/2022 $70.00 Call options @ $2.48 when the stock price was $69.54.
06/03/2022 5 MU $70.00 Calls closed slightly below the $70.00 strike price @ $69.94 per share. So, the Call options expired and 500 Micron shares remain in the Covered Calls Advisor Portfolio.
06/06/2022 Continued Micron Covered Calls position by selling 5 June 17th, 2022 $70.00 Call options @ $3.20 per share against the 500 Micron shares owned. Micron's stock price had increased to $71.53 early in this morning's trading when this transaction was executed.
6/17/2022 Five Micron $70.00 Call options expired out-of-the-money and 500 Micron shares remain in the Covered Calls Advisor Portfolio
6/21/2022 Continued Micron Covered Calls position by selling five July
15th, 2022 $60.00 Call options @ $2.06 per share. The stock price was
$57.20 when this transaction was executed. The Call options' Implied
Volatility was 53.6 and the Delta was 39.4.
7/05/2022 Estimated ex-dividend of $.10 per share.
A possible overall performance result (including commissions) would be as follows:
100% Cash-Secured Puts Cost Basis: $36,246.65
= ($72.50 - $.92) * 500 shares + $3.35 commission
Net Profit:
(a) Options Income: +$6,459.90
= ($.92 + $2.28 + $2.02 + $2.48 + $3.20 +$2.06) * 500 shares - $20.10 commissions
(b) Dividend Income: +$50.00 = $.10 per share x 500 shares
(c) Capital Appreciation (If Micron stock is above the $60.00 strike price at the July 15th, 2022 options expiration date): -$6,250.00
= ($60.00 July 15th, 2022 strike price - $72.50 original strike price) * 500 shares
Total Net Profit (If Micron stock price is above the $60.00 strike price at options expiration): +$259.90
= (+$6,459.90 options income +$50.00 dividend income -$6,250.00 capital appreciation)
= +$259.90/$36,246.65
Annualized Return-on-Investment: +2.4%
= (+$259.90/$36,246.65) * (365/107 days)
