The return-on-investment results for this Qualcomm Inc. position was: +1.0% absolute return in 19 days (equivalent to a +18.8% 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 4.4% since its original purchase price just 19 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:
11/25/2022 Bought 200 shares of Qualcomm stock @ $124.52 per share
11/25/2022 Sold 2 Qualcomm Dec. 9th, 2022 $120.00 Call options @ $5.84 per share
11/30/2022 Ex-dividend of $150.00 ($.75 per share x 200 shares)
12/9/2022 Two QCOM Calls closed below the $120.00 strike price @ $119.05 per share, so the 2 QCOM Call options expired and 200 Qualcomm shares remained in the Covered Calls Advisor Portfolio.
12/12/2022 Closed out this Qualcomm Covered Calls position by selling the 200 remaining QCOM shares @ $119.10.
The overall performance results (including commissions) would be as follows:
Covered Calls Net Investment: $23,737.34
= ($124.52 - $5.84) * 200 shares + $1.34 commission
Net Profit Components:
(a) Options Income: +$1,166.66
= ($5.84 * 200 shares) - $1.34 commission
(b) Dividend Income: +$150.00
= $.75 dividend per share x 200 shares
(c) Capital Appreciation: -$1,084.00
= ($119.10 - $124.52) * 200 shares
Net Profit: +$232.66
= (+$1,166.66 options income +$150.00 dividend income - $1,084.00 capital appreciation)
Absolute Return-on-Investment: +1.0%
= +$232.66/$23,737.34
Equivalent Annualized Return-on-Investment: +18.8%
= (+$232.66/$23,737.34) * (365/19 days)
Jeff Partlow (The Covered Calls Advisor)
partlow@cox.net
