Established Covered Calls Position in Skyworks Solutions Inc.

This afternoon a short-term Covered Calls position was established in Skyworks Solutions Inc. (ticker SWKS).  Two hundred shares were purchased at $106.86 and two Aug 30th, 2024 weekly Call options were sold at the $104.00 in-the-money strike price at $3.56 per share--a buy/write net debit transaction of $103.30 per share, so a $.70 per share time value profit potential.  In addition, tomorrow is a Skyworks ex-dividend date with a $.70 ex-dividend (2.6% annual dividend yield) which is included in the potential return-on-investment results detailed below. 

A potential return-on-investment result is +1.3% absolute return-on-investment (equivalent to +44.8% annualized return-on-investment for the next 11 days) if the Skyworks Solutions Inc. share price is in-the-money (i.e. above the $104.00 strike price) and therefore assigned on its August 30th, 2024 options expiration date.

 
Skyworks Solutions Inc. (SWKS) -- New Covered Calls Position 

The Buy/Write transaction was as follows:
8/19/2024 Bought 200 shares of Skyworks Solutions @ $106.86 per share.  
8/19/2024 Sold 2 SWKS August 30th, 2024 $104.00 Call options @ $3.56 per share.  The Implied Volatility of these Call options was 21.4 and the probability that the Calls will expire in-the-money on the options expiration date was 74.8% when this transaction was executed today. 

8/20/2024 Ex-dividend of $.70 per share.

A possible overall performance result (including commissions) for this Skyworks Solutions Inc. 
Covered Calls position is as follows:
Covered Calls Net Investment: $20,661.34
= ($106.86 - $3.56) * 200 shares + $1.34 commission

Net Profit:
(a) Options Income: +$710.66
= ($3.56 * 200 shares) - $1.34 commission
(b) Dividend Income: +$140.00 = $.70 x 200 shares
(c) Capital Appreciation (If 200 Skyworks Solutions Inc. shares assigned at $104.00 strike price at expiration): -$572.00
+($104.00 - $106.86) * 200 shares

Total Net Profit Potential (If 200 Skyworks Solutions shares assigned at $104.00 strike price at expiration): +$278.66
= (+$710.66 options income +$140.00 dividend income -$572.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.3%
= +$278.66/$20,661.34
Potential Annualized Return-on-Investment: +44.8%
= (+$278.66/$20,661.34) * (365/11 days)