There was one Covered Calls position in the Covered Calls Advisor Portfolio with a February 28th, 2023 weekly options expiration date. This position in CVS Health Corporation (ticker CVS) was closed out yesterday since its stock price of $73.31 at the market close yesterday was in-the-money; so the three 4/28/2023 $73.00 Call options expired worthless and the 300 shares owned were assigned (i.e. sold) at their $73.00 strike price.
As detailed below, the result achieved was a +1.6% absolute return-on-investment (equivalent to a +34.3% annualized return-on-investment) for the 17 days holding period). This result demonstrates that even with a moderate decline in a company's stock price (-2.0% in this case), a positive outcome (+1.6% in this case) can be achieved by establishing in-the-money Covered Calls for companies with their quarterly ex-dividend dates prior to the options expiration date. The original post showing how the application of my Covered Calls Dividend Capture Strategy was utilized for this CVS position is shown here.
CVS Health Corp. (CVS) -- Covered Calls Position Closed Out by Assignment on 4/28/2023 Options Expiration Date
The original buy/write transaction was:
4/12/2023 Bought 300 CVS shares @ $74.83
4/12/2023 Sold 3 CVS 4/28/2023 $73.00 Call options @ $2.39
4/20/2023 Quarterly ex-dividend date at $.605 per share
4/28/2023 This CVS Covered Calls position was in-the-money on its expiration date, so the 3 Call options expired and the 300 CVS
shares were sold at the $73.00 strike price.
The overall performance results (including commissions) for this CVS Health Covered Calls position are as follows:
CVS Covered Calls Net Investment: $21,734.01
= ($74.83 - $2.39) * 300 shares + $2.01 commission
Net Profit Components:
(a) Options Income: +$714.99
= ($2.39 * 300 shares) - $2.01 commission
(b) Dividend Income (CVS stock assigned at the April 28th, 2023 options expiration date): +$181.50
= ($.605 dividend per share x 300 shares)
(c) Capital Appreciation: -$549.00
= +($73.00 - $74.83) * 300 shares
