The return-on-investment results for this Qualcomm Inc. position was: +1.0% absolute return in 20 days (equivalent to a +19.1% annualized return-on-investment).
This Covered Calls position demonstrates the benefit of selling moderately in-the-money Covered Calls in bearish markets. This Qualcomm stock price declined by 5.6% since its original purchase price just 20 days ago, however a satisfactory return-on-investment profit was still achieved (as detailed below).
Qualcomm Inc.(QCOM) -- Covered Calls Position Closed
The original simultaneous buy/write transactions was as follows:
08/23/2022 Bought 200 shares of Qualcomm stock @ $140.80 per share
08/23/2022 Sold 2 Qualcomm Sept. 9th, 2022 $134.00 Call options @ $8.50 per share
08/31/2022 Ex-dividend of $150.00 ($.75 per share x 200 shares)
09/09/2022 Two QCOM Calls closed below the $134.00 strike price @ $132.05 per share, so the 2 QCOM Call options expired and 200 Qualcomm shares remained in the Covered Calls Advisor Portfolio.
09/12/2022 Closed out this Qualcomm Covered Calls position by selling 200 shares @ $132.94 early in today's trading day.
The overall performance results (including commissions) are as follows:
Covered Calls Cost Basis: $26,461.34
= ($140.80 - $8.50) * 200 shares + $1.34 commission
Net Profit Components:
(a) Options Income: +$1,698.66
= ($8.50 * 200 shares) - $1.34 commission
(b) Dividend Income: +$150.00
= $.75 dividend per share x 200 shares
(c) Capital Appreciation (Qualcomm stock sold on 9/12/2022 @ $132.94 per share): -$1,572.00
= ($132.94 - $140.80) * 200 shares
Net Profit: +$276.66
= (+$1,698.66 options income +$150.00 dividend income - $1,572.00 capital appreciation)
Absolute Return-on-Investment: +1.0%
= +$276.66/$26,461.34
Equivalent Annualized Return-on-Investment: +19.1%
= (+$276.66/$26,461.34) * (365/20 days)
Jeff Partlow (The Covered Calls Advisor)
partlow@cox.net
