Established Covered Calls in Novo-Nordisk Global

Today, a Covered Calls position was established in Novo-Nordisk Global (ticker NVO) with the purchase of 200 shares at $132.34 per share and two March 28th, 2024 quarterly Call options were sold for $6.32 per share at the $128.00 strike price.  So, the corresponding potential time value (aka extrinsic value) profit is $1.98 per share = [$6.32 Call options premium - ($132.34 stock purchase price - $128.00 strike price)].  A moderately in-the-money Covered Calls positions was established with the Delta of the Calls at 70.6 when this buy/write transaction was executed, which approximates the probability of assignment on the March 28th, 2024 options expiration date.  Novo-Nordisk's has an upcoming semi-annual ex-dividend at $.9299 per share (2.8% dividend yield at the current stock price) on March 22nd is prior to the March 28th options expiration date, so this dividend is included in the potential return-on-investment results shown below.  As shown on the chart at the bottom of this post, eight of the nine criteria in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet were met for this position.  As I also prefer, the next quarterly earnings report on May 2nd, 2024 is after the options expiration date. 

Novo-Nordisk is a pharmaceutical company based in Denmark. Its key divisions include Diabetes Care, Obesity Care, and Rare Diseases. Key products include Ozempic, Victoza, and insulin for diabetes; Wegovy and Saxenda for obesity; and treatments for rare blood and endocrine disorders.

Two potential return-on-investment results are: (a) +1.6% absolute return-on-investment (equivalent to +52.0% annualized return-on-investment for the next 11 days) if the stock is assigned early (on the last trading day prior to the March 22nd, 2022 ex-dividend date); OR (b) +2.3% absolute return-on-investment (equivalent to +49.5% annualized return-on-investment over the next  17 days) if the stock is assigned on the March 28th, 2024 options expiration date. 

Novo-Nordisk Global (NVO) -- New Covered Calls Position
The simultaneous buy/write transaction was as follows:
3/11/2024 Bought 200 shares of Novo-Nordisk stock @ $132.34 per share.  
3/11/2024 Sold 2 NVO March 28th, 2024 $128.00 Call options @ $6.32 per share.
3/22/2024 Upcoming ex-dividend of $.9299 per share

Two possible overall performance results (including commissions) would be as follows:
Covered Calls Net Investment: $25,205.34
= ($132.34 - $6.32) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$1,262.66
= ($6.32 * 200 shares) - $1.34 commission
(b) Dividend Income (If Novo-Nordisk shares assigned on 3/21/2024, the business day prior to the 3/22/2024 ex-dividend date): = +$0.00; or
(b) Dividend Income (If NVO shares assigned at the 3/28/2024 options expiration date): +$185.98
= $.9299 per share x 200 shares
(c) Capital Appreciation (If Novo-Nordisk shares assigned early on 3/22/2024): -$868.00
= ($128.00 strike price -$132.34 stock purchase price) * 200 shares; or
(c) Capital Appreciation (If NVO shares assigned with stock above the $128.00 strike price at the March 28th options expiration): -$868.00
= ($128.00 -$132.34) * 200 shares

1. Potential Net Profit (If Novo-Nordisk shares assigned on 3/21/2024, the day prior to the March 22nd ex-dividend date): +$394.66
= (+$1,262.66 options income +$0.00 dividend income - $868.00 capital appreciation)
2. Potential Net Profit (If NVO price is above $128.00 strike price at the March 28th options expiration): +$580.64
= (+$1,262.66 options income +$185.98 dividend income - $868.00 capital appreciation)

1. Absolute Return-on-Investment (If Novo-Nordisk shares assigned early on 3/21/2024, the day prior to the March 22nd, 2024 ex-dividend date): +1.6%
= +$394.66/$25,205.34
Equivalent Annualized Return-on-Investment (If assigned early on day prior to ex-div date): +52.0%
= (+$394.66/$25,205.34) * (365/11 days)

2. Absolute Return-on-Investment (If Novo-Nordisk price is above $128.00 strike price at the March 28th options expiration date): +2.3%
= +$580.64/$25,205.34
Equivalent Annualized Return-on-Investment (If assigned on 3/28/2024 options expiration date): +49.5%
= (+$580.64/$25,205.34) * (365/17 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, eight of the nine criteria are achieved for this Novo-Nordisk Global Covered Calls position.