Established Covered Calls Position in Yum China Holdings Inc.

Today my buy/write limit order was executed in Yum China Holdings Inc. (ticker YUMC) when 500 shares were bought and 5 Call options were sold simultaneously at the April 19th, 2024 monthly options expiration date and at the $37.50 strike price. The net debit limit price for my order was $36.98 per share which was executed when 500 shares were purchased at $39.43 and 5 April 19th, 2024 Call options were sold for $2.45 per share.  Therefore, a maximum potential time value profit of $.52 per share = [$2.45 options premium - ($39.43 stock price - $37.50 strike price)] is available for this position.  A Covered Calls position was preferable to its comparable Cash-Secured Puts position since the time value of $.52 for the Calls exceeded the $.40 available for the Puts. 

Importantly to the Covered Calls Advisor, there is no quarterly earnings report prior to the options expiration date since the next earnings report on April 29th, 2024 is after the April 19th options expiration date.  The Implied Volatility of the Calls seemed attractive at 33.2 when this position was established since the Beta (1 Year) is relatively low at 0.78.  The probability of being in-the-money on the options expiration date is 74.0%.    

According to LSEG (Refinitiv), there are 27 Wall Street analysts covering Yum China and their average Target Price is +40.0% above today's purchase price.  Another reason for establishing this position was that Yum China met all 17 filters in my Future 5-Year PEG Ratios stock screener (see Rankings and Filter breakdown in the chart below).   I highlighted some particularly impressive numbers in green.   

 
As detailed below, a potential result is +1.4% absolute return-on-investment (equivalent to +31.7% annualized return-on-investment over the next 16 days) if the stock is assigned on the April 19th, 2024 options expiration date.

Yum China Holdings Inc. (YUMC) -- New Covered Calls Position
The buy/write transaction was:
4/3/2024 Bought 500 Yum China shares @ $39.43.
4/3/2024 Sold 5 Yum China 4/19/2024 $37.50 Call options @ $2.45 per share.  

A possible overall performance results (including commissions) for this Yum China Holdings Inc. Covered Calls position is as follows:
Covered Calls Net Investment: $18,493.35
= ($39.43 - $2.45) * 500 shares + $3.35 commission

Net Profit Components:
(a) Options Income: +$1,221.65
= ($2.45 * 500 shares) - $3.35 commission
(b) Dividend Income: +$0.00

(c) Capital Appreciation (If shares assigned at $37.50 strike price at the April 19th options expiration): -$965.00

+($37.50 strike price - $39.43 stock purchase price) * 500 shares

Total Net Profit (If YUMC's shares assigned at $37.50 at the April 19th, 2024 expiration): +$256.65

= (+$1,221.65 options income +$0.00 dividend income -$965.00 capital appreciation)

Potential Absolute Return-on-Investment (If Yum China's shares assigned on the April 19th options expiration date): +1.4%

= +$256.65/$18,493.35

Potential Annualized Return-on-Investment: +31.7%

= (+$256.65/$18,493.35) * (365/16 days)