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Monday, October 16, 2023

Continuation of Covered Calls Positions in iShares China Large-Cap ETF

Last Friday, the October 13th, 2023 Covered Calls positions in iShares China Large-Cap ETF (ticker FXI) closed out-of-the-money.  So the 10 Call options expired and the 1,000 shares remained in the Covered Calls Advisor Portfolio.  This morning, I decided to continue this Covered Calls positions by selling 10 Call options to rollout to the November 3rd, 2023 options expiration date.  The transactions-to-date for this position as well as potential return-on-investment results if the position is assigned on its November 3rd, 2023 options expiration date is detailed below.

iShares China Large-Cap ETF (FXI) -- Continuation of Covered Calls Position
The original Buy/Write transaction was as follows:
9/1/2023 Bought 1,000 shares of iShares China Large-Cap ETF @ $27.99 per share.  
9/1/2023 Sold 10 FXI Sept. 15th, 2023 $28.00 Call options @ $.63 per share.
9/15/2023 Ten FXI Call options closed out-of-the-money, so these options expired and 1,000 shares remain in the Covered Calls Advisor Portfolio.
9/22/2023 Continued this iShares China Large-Cap ETF Covered Calls position by selling 10 FXI October 13th, 2023 Call options at the $27.50 strike price for $.60 per share.  The iShares China Large-Cap ETF share price was $27.21 when these Calls were sold and their Implied Volatility was 27.7.
10/13/2023 Ten FXI Call options closed out-of-the-money, so these options expired and 1,000 shares remain in the Covered Calls Advisor Portfolio.
10/16/2023 Continued this iShares China Large-Cap ETF Covered Calls position by selling 10 FXI November 3rd, 2023 Call options at the $27.00 strike price for $.49 per share.  The iShares China Large-Cap ETF share price was $26.49 when these Calls were sold and their Implied Volatility was 29.4.

A possible overall performance result (including commissions) for this iShares China Large-Cap ETF Covered Calls position if assigned on the 11/3/2023 options expiration date is as follows:
FXI Covered Calls Net Investment: $27,366.70
= ($27.99 - $.63) * 1,000 shares + $6.70 commission

Net Profit:
(a) Options Income: +$1,699.90
= ($.63 + $.60 + $.49) * 1,000 shares - $20.10 commissions
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 1,000 iShares China Large-Cap ETF shares assigned at the $27.00 strike price at the 11/3/2023 expiration): -$990.00
+($27.00 - $27.99) * 1,000 shares

Total Net Profit Potential (If 1,000 iShares China Large-Cap ETF shares assigned at the $27.00 strike price at the options expiration date): +$709.90
= (+$1,699.90 options income +$0.00 dividend income -$990.00 capital appreciation)

Potential Absolute Return-on-Investment: +2.6%
= +$709.90/$27,366.70
Potential Annualized Return-on-Investment: +15.0%
= (+$709.90/$27,366.70) * (365/63 days)