Covered Call Position Established in Becton Dickinson & Company

A short-term Covered Call net debit limit order was executed and 100 shares of Becton Dickinson & Company (ticker symbol BDX) stock were purchased at $233.29 and 1 March 15th, 2024 $230.00 Call option was sold at $4.73 per share -- a net debit of $228.56 per share.   So, the corresponding potential time value (aka extrinsic value) profit was $1.44 per share = [$4.723 Call options premium - ($233.29 stock purchase price - $230.00 strike price)].  The Delta was 67.7 which closely approximates a probability of assignment on the options expiration date of 67.7%.  Given the Covered Calls Advisor's current Neutral Overall Market Meter outlook, a slightly in-the-money Covered Calls position was established. 

There is an upcoming ex-dividend on Thursday of $.95 per share (a 1.6% annual dividend yield).  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.

As detailed below, a potential outcome for this Becton Dickinson & Company investment is +1.0% absolute return-on-investment for the next 10 days (equivalent to +38.1% annualized-return-on-investment) if the stock closes above the $230.00 strike price on the March 15th, 2024 options expiration date.

Becton Dickinson & Company (BDX) -- New Covered Call Position

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

3/5/2024 Bought 100 shares of Becton Dickinson stock @ $233.29 per share.  
3/5/2024 Sold 1 BDX March 15th, 2024 $230.00 Call option @ $4.73 per share.
3/7/2024 Ex-dividend of $.95 per share.

A possible overall performance result (including commissions) if this position is assigned on its 3/15/2024 option expiration date is as follows:
Covered Calls Net Investment: $22,856.67
= ($233.29 - $4.73) * 100 shares + $.67 commission

Net Profit Components:
(a) Call Option Income: +$472.33
= ($4.73 * 100 shares) - $.67 commission
(b) Dividend Income: +$95.00
= $.95 x 100 shares
(c) Capital Appreciation (If Becton Dickinson stock is above the $230.00 strike price at the 3/15/2024 option expiration date): -$329.00
= ($230.00 - $233.29) * 100 shares

Potential Total Net Profit (If assigned at expiration): +$238.33
= (+$472.33 option income + $95.00 dividend income - $329.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.0%
= +$238.33/$22,856.67
Potential Equivalent Annualized-Return-on-Investment: +38.1%
= (+$238.33/$22,856.67) * (365/10 days)