Rolled Out the Bank of America Corporation Covered Calls

The Covered Calls Advisor Portfolio has a Covered Calls position in Bank of America Corporation (ticker BAC)  that expired out-of-the-money at last Friday's options expiration date.  BAC closed at $31.70 Friday and the strike price was $35.50.  I decided to continue this Bank of America Covered Calls position today by rolling-out at the same $32.50 strike price to the December 30th, 2022 expiration by selling 5 Calls at $.52 per share when the price of BofA was $32.41.   

As detailed below, a potential return-on-investment result is -5.4% absolute return (equivalent to -63.8% annualized return for the 31 days holding period) if the Bank of America price is in-the-money (i.e. above the $32.50 strike price) and therefore assigned on the December 30th, 2022 options expiration date.  My plan is to attempt to gradually repair this losing position back toward profitability.  Fortunately, the Open Interest in weekly Bank of America options is very high (which provides for the desired tight Bid/Ask options spreads), so continuing this Covered Calls position by rolling out two weeks at a time (as is being done with today's rollout) is a feasible approach. 

Bank of America Corporation (BAC) -- Covered Calls Position Rolled Out
The original net debit limit order buy/write transaction was as follows:
11/29/2022 Bought 500 Bank of America Corp. shares at $36.80
11/29/2022 Sold 5 BAC December 30th, 2022 $35.50 Call options @ $1.67 per share.
12/01/2022 Ex-dividend of $.22 per share
12/16/2022 5 BAC Call options expired out-of-the-money and 500 shares remain in the Covered Calls Advisor Portfolio
12/20/2022 Continued BAC Covered Calls position by selling 5 Dec. 30th, 2022 $32.50 Call options @ $.52 per share when the stock price was $32.41. 

A possible overall performance result (including commissions) if this Bank of America Corp. Covered Calls position is assigned at the 12/30/2022 options expiration date is as follows:
Original Net Investment: $17,568.35
= ($36.80 - $1.67) * 500 shares + $3.35 commission

Net Profit:
(a) Options Income: +$1,088.30
= ($1.67 + $.52) * 500 shares - $6.70 commissions
(b) Dividend Income: +$110.00 = $.22/share x 500 shares
(c) Capital Appreciation (If 500 BAC shares assigned at $32.50 strike price at expiration): -$2,150.00
+($32.50 strike price - $36.80 original stock purchase price) * 500 shares

Total Net Profit (If 500 Bank of America shares assigned at $32.50 strike price at expiration): -$951.70
= (+$1,088.30 options income +$110.00 dividend income -$2,150.00 capital appreciation)

Absolute Return-on-Investment: -5.4%
= -$951.70/$17,568.35
Annualized Return-on-Investment: -63.8%
= (-$951.70/$17,568.35) * (365/31 days)

Jeff Partlow (The Covered Calls Advisor)
partlow@cox.net