A November 4th, 2022 Covered Calls buy/write limit order was executed today in the Mosaic Company (ticker MOS) at a net debit price of $46.31 per share. Three hundred shares were purchased at $51.96 and three Nov. 4th, 2022 $47.00 strike price Call options were sold at $5.65 per share. The corresponding extrinsic value (i.e. time value) was $.69 per share [$5.65 Call options premium - ($51.96 stock purchase price - $47.00 strike price)]. The Implied Volatility of the Calls was very high at 57.8 and the approximate probability of assignment at options expiration was 81.0% when this transaction was executed. There is no ex-dividend and, as I prefer, no earnings report prior to the options expiration date.
Mosaic's trailing twelve months earnings per share is $9.35 (a P/E ratio is only 5.6) which is slightly less than one-half of its prior 10-year average P/E ratio. Regarding its near-term future, Mosaic's FY2022 EPS are expected to increase further from the current TTM of $9.35 to $12.95. This positive trend should benefit the stock price. In addition, Wall Street analysts' current average target price is $65.31 (+41.0% above today's purchase price).
Some key numbers for this Mosaic Company Covered Calls position are:
Covered Calls Net Investment: $13,895.01
Profit if Assigned on Expiration Date: $204.99
Days Until November 4th, 2022 Options Expiration: 15
Absolute Return-on-Investment if Assigned at Expiration: +1.5%
Annualized Return-on-Investment if Assigned at Options Expiration: +35.9%
