Established Covered Calls in Taiwan Semiconductor Manufacturing Company Ltd.

This afternoon, my net debit limit order was executed and a Covered Calls position was established in Taiwan Semiconductor Manufacturing Company Ltd. (ticker TSM) when the Covered Calls Advisor's buy/write limit order for the December 22nd, 2023 $93.00s executed at a net debit price of $92.13.  Two hundred Taiwan Semi shares were purchased at $96.23 and 2 December 22nd, 2023 $93.00 Calls were sold at $4.10 per share.  So, the corresponding time value (aka extrinsic value) was $.87 per share = [$4.10 Call options premium - ($96.23 stock purchase price - $93.00 strike price)].  Given the Covered Calls Advisor's current Neutral Overall Market Meter outlook, a slightly in-the-money Covered Calls position was established--the Delta was 72.9 which closely approximates the probability that the Call options will be in-the-money on the options expiration date.  In addition, the Implied Volatility of the Calls was 24.7 when the position was established which, as desired, was above the VIX which is now only 13.2. 

Taiwan Semi goes ex-dividend at $.4724 -- a 2.0% annualized dividend yield at today's stock purchase price.  This dividend is included in the potential return-on-investment results shown below.   Also, as preferred, there is no earnings report prior to the options expiration date and analysts' current stock target price is $113.36 per share (+17.8% above today's purchase price).

As detailed below, two potential return-on-investment results for this Taiwan Semi Covered Calls position are: (a) +0.9% absolute return-on-investment (equivalent to +34.1% annualized return-on-investment for the next 10 days) if the stock is assigned early [i.e. on Dec. 13th which is the last trading day prior to the Dec. 14th ex-dividend date]; OR (b) +1.4% absolute return (equivalent to +29.4% annualized return over the next 18 days) if the stock is assigned on the December 22nd, 2023 options expiration date. 

Taiwan Semiconductor Manufacturing Company Ltd. (TSM) -- New Covered Calls Position
The simultaneous buy/write transactions was as follows:
12/4/2023 Bought 200 shares of Taiwan Semiconductor stock @ $96.23 per share 
12/4/2023 Sold 2 Taiwan Semi December 22nd, 2023 $93.00 Call options @ $4.10 per share
12/14/2023 Upcoming ex-dividend at $.4724 per share

The overall performance results (including commissions) would be as follows:
Covered Calls Cost Basis: $18,427.34
= ($96.23 - $4.10) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$818.66
= ($4.10 * 200 shares) - $1.34 commission
(b) Dividend Income (If Taiwan Semi stock assigned on the Dec. 14th ex-dividend date): $0.00
(b) Dividend Income (If TSM stock assigned on the Dec. 22nd options expiration date): +$94.48
= $.4724 dividend per share x 200 shares
(c) Capital Appreciation (If Taiwan Semi stock assigned on the Dec. 14th ex-dividend date): -$646.00
= ($93.00 - $96.23) * 200 shares
(c) Capital Appreciation (If TSM stock is above $93.00 strike price and therefore assigned at the Dec. 22nd expiration): -$646.00
= ($93.00 - $96.23) * 200 shares

1. Potential Net Profit (If TSM shares assigned on 12/13/2023, the day prior to the Dec. 14th ex-dividend date): +$172.66
= (+$818.66 options income +$0.00 dividend income - $646.00 capital appreciation)
2. Potential Net Profit (If stock price is above $93.00 strike price at the Dec. 22nd options expiration): +$267.14
= (+$818.66 options income +$94.48 dividend income - $646.00 capital appreciation)

1. Absolute Return-on-Investment (If Taiwan Semi shares assigned on 12/13/2023, the day prior to the 12/14/2023 ex-dividend date): +0.9%
= +$172.66/$18,427.34
Equivalent Annualized Return-on-Investment (If assigned early on day prior to ex-div date): +34.2%
= (+$172.66/$18,427.34) * (365/10 days)

2. Absolute Return-on-Investment (If Taiwan Semi price is above $93.00 strike price and therefore assigned at the Dec. 22nd options expiration): +1.4%
= +$267.14/$18,427.34
Equivalent Annualized Return-on-Investment (If assigned on the 12/22/2023 options expiration date): +29.4%
= (+$267.14/$18,427.34) * (365/18 days)

At least eight of the nine metrics used in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet (see below) must be 'YES' prior to establishing a new Covered Calls position using the Covered Calls Advisor's Dividend Capture strategy.  As shown below, all nine criteria are achieved for this Taiwan Semiconductor Mfg. Co. Ltd. Covered Calls position.