Covered Call Position Established in Albemarle Corporation

Today, a Covered Call net debit limit order was executed when 100 shares of Albemarle Corporation (ticker symbol ALB) stock was purchased at $219.98 and 1 April 21st, 2023 $210.00 Call option was  simultaneously sold at $14.50 per share -- a net debit of $205.48 per share -- so the potential time value profit if the stock is in-the-money and therefore closed out by assignment at expiration is $4.52 per share [$14.50 Call option premium - ($219.98 stock purchase price - $210.00 strike price)].   The Call option Delta of 69.0 gives a good approximation of the probability of 69.0% that this position will be in-the-money and therefore assigned on the 4/21/2023 options expiration date.

Albemarle is a leading lithium provider with mining operations in Chile, Australia, and the U.S.(Nevada).  Lithium-based products are important components of the majority of electric batteries for EVs, so its ongoing demand prospects are very good.  Albemarle is very profitable and its stock valuation is attractive with its trailing twelve months P/E ratio at only 10.0.  In addition, it exceeded analysts' profit estimates in every quarter this past year.  It's 2023 earnings are currently expected to grow by an additional 29% and the average target price by the 26 analysts currently covering the company is $314.67 (+43.0% above today's purchase price).

As detailed below, a potential outcome for this Albemarle Corporation investment is +2.2% absolute return-on-investment for the next 19 days (equivalent to +42.2% annualized-return-on-investment) if the stock closes above the $210.00 strike price on the April 21st, 2023 options expiration date.

Albemarle Corporation (ALB) -- New Covered Call Position

The net debit buy/write limit order was executed as follows:
4/3/2023 Bought 100 shares of Albemarle Corporation stock @ $219.98 per share 
4/3/2023 Sold 1 ALB April 21st, 2023 $210.00 Call option @ $14.50 per share
Note: The Implied Volatility of the Call option was 43.2 when this position was established, an attractive level given the next earnings report in May is after the 4/21/2023 options expiration date.

A possible overall performance result (including commissions) if this Albemarle Corporation position is assigned on its April 21st options expiration date is follows:
Covered Call Net Investment: $20,548.67
= ($219.98 - $14.50) * 100 shares + $0.67 commission

Net Profit Components:
(a) Option Income: +$1,449.33
= ($14.50 * 100 shares) - $0.67 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If Albemarle stock is above the $210.00 strike price and therefore assigned at its April 21st options expiration): -$998.00
= ($210.00 -$219.98) * 100 shares

Potential Total Net Profit (If assigned at the 4/21/2023 options expiration date): +$451.33
= (+$1,449.33 option income +$0.00 dividend income -$998.00 capital appreciation)

Potential Absolute Return-on-Investment: +2.2%
= +$451.33/$20,548.67
Potential Equivalent Annualized-Return-on-Investment: +42.2%
= (+$451.33/$20,548.67) * (365/19 days)