Established Covered Calls in Abercrombie & Fitch Co.

A Covered Calls position was established in Abercrombie & Fitch Co. (ticker ANF) with a January 31st, 2025 options expiration date.   A net limit buy/write order was executed when 300 shares of Abercrombie were purchased at $128.35 and three January 31st, 2025 Call options at the $120.00 strike price were sold at $10.37 per share.  The time value was $2.02 = [$10.37 Call options premium - ($128.35 stock price - $120.00 strike price)].  The Implied Volatility of these Calls was 42.8 when this transaction was executed and the probability that the Call options will be in-the-money on the options expiration date was 73.7% when this position was established.  As preferred, the next quarterly earnings report on March 5th, 2025 is after the January 31st options expiration date. 

Abercrombie was the #1 ranked stock in my Mid-Cap Value+Profitability+Growth custom stock screener that I developed using my StockRover.com stock screener.  As detailed below, it passed every filter in my screener:

A potential return-on-investment result is +1.7% absolute return (equivalent to +41.9% annualized return for the next 15 days) if the stock price is in-the-money (i.e. above the $120.00 strike price) and therefore assigned on the January 31st options expiration date.

Abercrombie & Fitch Co. (ANF) -- New Covered Calls Position

The Buy/Write limit order was executed as follows:
1/16/2025 Bought 300 shares of Abercrombie & Fitch Co. stock @ $128.35 per share.  
1/16/2025 Sold 3 A&F January 31st, 2025 $120.00 Call options @ $10.37 per share.  

A possible overall performance result (including commissions) for this Abercrombie & Fitch Co. Covered Calls position is as follows:
Stock Purchase Cost: $35,396.01
= ($128.35 - $10.37) *300 shares + $2.01 commission

Net Profit:
(a) Options Income: +$3,108.99
= ($10.37 *300 shares) - $2.01 commission
(b) Dividend Income: +$0.00

(c) Capital Appreciation (If 300 ANF shares assigned at $120.00 strike price at expiration): -$2,505.00
+($120.00 - $128.35) * 300 shares

Total Net Profit (If 300 Abercrombie shares assigned at $120.00 strike price at expiration): 

+$603.99 

= (+$3,108.99 options income +$0.00 dividend income - $2,505.00) capital appreciation

 

Absolute Return-on-Investment: +1.7%

= +$603.99/$35,108.99

Annualized Return-on-Investment: +41.9%

= (+$603.99/$35,108.99) * (365/15 days)