Covered Calls Position Established in Lamb Weston Holdings Inc.

My buy/write net debit limit order was executed and 200 shares of Lamb Weston Holdings Inc. (ticker symbol LW) stock were purchased at $102.55 and 2 February 16th, 2024 $100.00 Call options were sold at $3.55 per share -- a net debit of $99.00 per share.   So, the corresponding time value (aka extrinsic value) was $1.00 per share = [$3.55 Call options premium - ($102.55 stock purchase price - $100.00 strike price)].  The Delta was 69.8 which closely approximates a probability of assignment on the options expiration date of 69.8%.  Given the Covered Calls Advisor's current Neutral Overall Market Meter outlook, a slightly in-the-money Covered Calls position was established. 

Lamb Weston produces, distributes, and markets frozen potato products worldwide. They go ex-dividend at $.36 per share (a 1.4% annualized dividend yield) tomorrow.  This dividend is an increase of 28.6% above last year's quarterly dividend rate and this dividend is included in the potential return-on-investment results detailed below.   Also, as preferred, there is no earnings report prior to the options expiration date and analysts' current stock target price is $128.98 per share (+25.8% above today's stock purchase price).

As detailed below, a potential outcome for this Lamb Weston Holdings Inc. investment is +1.4% absolute return-on-investment for the next 16 days (equivalent to +31.2% annualized-return-on-investment) if the stock closes above the $100.00 strike price on the February 16th, 2024 options expiration date.

Lamb Weston Holdings Inc. (LW) -- New Covered Calls Position

The net debit buy/write limit order was executed as follows:

1/31/2024 Bought 200 shares of Lamb Weston stock @ $102.55 per share.  
1/31/2024 Sold 2 LW Feb. 16th, 2024 $100.00 Call options @ $3.55 per share.
2/1/2024 Ex-dividend of $.36 per share.

A possible overall performance result (including commissions) if this position is assigned on its 2/16/2024 option expiration date is as follows:
Covered Calls Net Investment: $19,801.34
= ($102.55 - $3.55) * 200 shares + $1.34 commission

Net Profit Components:
(a) Call Options Income: +$708.66
= ($3.55 * 200 shares) - $1.34 commission
(b) Dividend Income: +$72.00
= $.36 x 200 shares
(c) Capital Appreciation (If Lamb Weston stock is above the $100.00 strike price at the February 16th option expiration date): -$510.00
= ($100.00 - $102.55) * 200 shares

Potential Total Net Profit (If assigned at expiration): +$270.66
= (+$708.66 options income + $72.00 dividend income - $510.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.4%
= +$270.66/$19,801.34
Potential Equivalent Annualized-Return-on-Investment: +31.2%
= (+$270.66/$19,801.34) * (365/16 days)