Covered Calls Established in Global Payments Inc.

In this afternoon's trading session, a short-term Covered Calls position was established in Global Payments Inc. (ticker GPN) with the purchase of 300 shares at $117.74 per share and three December 20th, 2024 Call options were sold for $3.72 per share at the $115.00 strike price.  A moderately in-the-money Covered Calls positions was established with the probability that the Calls will expire in-the-money on the 12/20/2024 options expiration date was 71.3%.  

In addition to the $.98 potential time value decay profit at assignment for this position, Global Payments also goes ex-dividend this Friday (12/13/2024) at $.25 per share (0.8% dividend yield) which is prior to the December 20th options expiration date -- so this dividend is included in the potential return-on-investment results detailed below.  As I prefer, the next quarterly earnings report on February 13th, 2025 is after the Dec. 20th, 2024 options expiration date.

As detailed below, a potential return-on-investment result is:  +1.1% absolute return (equivalent to +35.6% annualized return-on-investment over the next 11 days) if the stock is assigned on the December 20th, 2024 options expiration date.

Global Payments Inc. (GPN) -- New Covered Calls Position 

The Buy/Write transaction was as follows:
12/9/2024 Bought 300 shares of Global Payments Inc. shares @ $117.74 per share.  
12/9/2024 Sold 3 GPN December 20th, 2024 $115.00 Call options @ $3.72 per share.  The Implied Volatility of these Call options was 21.5 today when this transaction was executed. 

A possible overall performance result (including commissions) if this stock is in-the-money (and therefore the stock is assigned (i.e. sold) at the $115.00 strike price) on the Dec. 20th options expiration date is as follows:

Covered Calls Net Investment: $34,208.01
= ($117.74 - $3.72) * 300 shares + $2.01 commission

Net Profit:
(a) Options Income: +$1,113.99
= ($3.72 * 300 shares) - $2.01 commission
(b) Dividend Income (If assigned on the 12/20/2024 options expiration date): +$75.00
= $.25 x 300 shares
(c) Capital Appreciation (If 300 Global Payments shares assigned at the $115.00 strike price): -$822.00
+($115.00 strike price - $117.74 stock purchase price) * 300 shares

Total Net Profit Potential (If 300 GPN shares assigned at the $115.00 strike price at the options expiration date): +$366.99
= (+$1,113.99 options income + $75.00 dividend income - $822.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.1%
= +$366.99/$34,208.01
Potential Annualized Return-on-Investment (if GPN shares assigned on their 12/20/2024 options expiration date): +35.6%
= (+$366.99/$34,208.01) * (365/11 days)