Established Covered Calls Position in Match Group Inc.

A Covered Calls position was established in Match Group Inc. (MTCH) when the Covered Calls Advisor's buy/write limit order at a net debit limit price of $38.22 was executed.  Four hundred shares were purchased at $40.76 and four July 7th, 2023 Call options were sold at $2.54 at the $39.00 strike price.  The time value was $.78 per share = [$39.00 strike price - ($40.76 stock purchase price - $2.54 Call options price)].   Given my current cautious stock market outlook, a moderately in-the-money Covered Calls position was established with a Delta of 70.8 which approximates a 70.8% probability this position will be in-the-money and therefore assigned on the July 7th, 2023 options expiration date.  As desired, there is no earnings report prior to the options expiration date.

A similar prior Covered Calls position in the Match Group was assigned last Friday and I decided to follow-up today with a similar position since I remain bullish on the company's prospects.  The Match Group is the leading online dating services company worldwide including several brands that include Tinder, Match, and Hinge.  Their stock price has plummeted by more than 40% in the past year.  Importantly, Match is profitable and their earnings per share are likely to be at an inflection point where they can begin to obtain regular quarterly revenue and profit increases based on their worldwide presence and their growth opportunities (especially in Asia but also in Europe).  Importantly, as part of their Q1 2023 earnings report, they announced a new $1.0 billion stock buyback authorization (10%+ of the current market cap) which will be implemented over the next two to three years using about half of their free cash flow resources.  The primary catalyst for my increasing optimism stems primarily from the dynamism of Match's relatively new CEO, Bernard Kim, who has been in his new position for only one year now but who demonstrated outstanding performance in his prior CEO role at Zynga.  In addition, Match meets all five of my current primary evaluation criteria for identifying worthwhile candidates for investing:

As detailed below, the potential return-on-investment results for this Match Group Inc. Covered Calls position is +2.0% absolute return (equivalent to +43.4% annualized return-on-investment for the next 17 days) if the stock is assigned on the July 7th options expiration date.

Match Group Inc. (MTCH) -- New Covered Calls Position

The buy/write transaction was:
6/21/2023 Bought 400 Match Group Inc. shares @ $40.76
6/21/2023 Sold 4 MTCH 7/7/2023 $39.00 Call options @ $2.54 per share.

A possible overall performance result (including commissions) for this Match Group Covered Calls position is as follows:
Match Group Covered Calls Net Investment: $15,290.68
= ($40.76 - $2.54) * 400 shares + $2.68 commission

Net Profit:
(a) Options Income: +$1,013.32
= ($2.54 * 400 shares) - $2.68 commission
(b) Dividend Income: +$0.00
= ($0.00 dividends per share x 400 shares)
(c) Capital Appreciation (If MTCH shares assigned at $39.00 strike price at expiration): -$704.00
+($39.00 - $40.76) * 400 shares

Total Net Profit (If options exercised on the July 7th, 2023 options expiration date): +$309.32

= (+$1,013.32 options income +$0.00 dividend income -$704.00 capital appreciation)

Potential Absolute Return-on-Investment (If the Match Group Inc. shares are assigned at the $39.00 strike price at the July 7th, 2023 options expiration date): +2.0%

= +$309.32/$15,290.68

Potential Annualized Return-on-Investment (If 400 Match Group shares assigned at $39.00 at the July 7th, 2023 options expiration): +43.4%

= ($309.32/$15,290.68) * (365/17 days)