For Applied Materials, two September 16th, 2022 $92.50 Call options were sold at $2.30 per share against the 200 shares owned in the Covered Calls Advisor Portfolio when the stock price today was $91.42. For Discover Financial Services, two Sept 16th, 2022 $100.00 Call options were sold at $1.80 per share against the 200 Discover shares owned when the stock price was $98.66. The details of these Covered Calls positions so far are provided below including potential return-on-investment results.
1. Applied Materials Inc. -- Continuation of Covered Calls Position
The $94.06 net debit buy/write limit order was transacted as follows:
08/24/2022 Bought 200 AMAT shares @ $100.76
08/24/2022 Sold 2 AMAT Sept. 2nd, 2022 $95.00 Call options @ $6.70 per share.
Note: as is often the case, these Call options were transacted slightly below the midpoint of the $6.65/$6.80 bid/ask spread.
9/2/2022 AMAT shares closed at $91.35, well below the $95.00 strike price, so the Calls expired and 200 AMAT shares remain in the Covered Calls Advisor Portfolio.
9/7/2022 Continued Applied Materials Covered Calls position by selling two Sept 16th, 2022 $92.50 Call options @ $2.30 per share. The stock price was $91.42 when this transaction was executed.
A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $18,813.34
= ($100.76 - $6.70) * 200 shares + $1.34 commission
Net Profit Components:
(a) Options Income: +$1,797.32
= ($6.70 + $2.30) * 200 shares - $2.68 commission
(b) Dividend Income: $0.00
(c) Capital Appreciation (If AMAT stock is above $92.50 strike price and therefore assigned on the Sept. 16th options expiration): -$1,652.00
= ($92.50 -$100.76) * 200 shares
Total Net Profit (If stock assigned on the September 16th options expiration date): +$145.32
= (+$1,797.32 options income +$0.00 dividend income -$1,652.00 capital appreciation)
Absolute Return-on-Investment (If stock assigned on Sept 16th, 2022 options expiration date): +0.8%
= +$145.32/$18,813.34
Equivalent Annualized Return-on-Investment: +11.7%
= (+$145.32/$18,813.34) * (365/24 days)
2. 
Discover Financial Services (DFS) -- Continuation of Covered Calls Position
The original buy/write transaction was as follows:
8/17/2022 Bought 200 shares of Discover Financial Services @ $108.10 per share
8/17/2022 Sold 2 DFS Sept. 2nd, 2022 $102.00 Call options @ $6.99 per share
8/24/2022 Ex-dividend of $.60 per share
9/2/2022 DFS shares closed at $99.53, well below the $102.00 strike
price, so the Calls expired and 200 Discover shares remain in the Covered
Calls Advisor Portfolio.
9/7/2022 Continued Discover Financial
Covered Calls position by selling two Sept 16th, 2022 $100.00 Call
options @ $1.80 per share. The stock price was $98.66 when this
transaction was executed.
A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $20,223.34
= ($108.10 - $6.99) * 200 shares + $1.34 commission
Net Profit Components:
(a) Options Income: +$1,755.32
= ($6.99 + $1.80) * 200 shares - $2.68 commission
(b) Dividend Income: $120.00
= $.60 per share x 200 shares
(c) Capital Appreciation (If DFS stock is above $100.00 strike price and
therefore assigned on the Sept. 16th options expiration): -$1,620.00
= ($100.00 -$108.10) * 200 shares
Total Net Profit (If stock assigned on the September 16th options expiration date): +$255.32
= (+$1,755.32 options income +$120.00 dividend income -$1,620.00 capital appreciation)
Absolute Return-on-Investment (If stock assigned on Sept 16th, 2022 options expiration date): +1.3%
= +$255.32/$20,223.34
Equivalent Annualized Return-on-Investment: +12.1%
= (+$255.32/$20,223.34) * (365/38 days)
