Established Covered Calls in Merck & Co. Inc.

This afternoon, a short-term Covered Calls position was established in Merck & Co. Inc. (ticker MRK) with the purchase of 200 shares at $80.24 per share and two April 17th, 2025 Call options were sold for $6.00 per share at the $75.00 strike price.  The extrinsic value (which represents the maximum profit potential for this position) was $.76 per share [$6.00 Call options premium - ($80.24 stock purchase price - $75.00 strike price)].  A moderately in-the-money Covered Calls position was established with the probability that the Calls will expire in-the-money on the 4/17/2025 options expiration date was 77.4%.  As I prefer, the next quarterly earnings report on April 24th, 2025 is after the April 17th options expiration date.

As shown in my Quality+Growth stock screener results in the table below, Merck meets all nineteen filters including scores in the 90s for both the overall Quality Score and the overall Growth Score filters.  

A potential return-on-investment result is +1.0% absolute return-on-investment (equivalent to a +46.7% annualized return-on-investment for the next 8 days) if the stock is assigned on the April 17th options expiration date. 

Merck & Co. Inc. (MRK) -- New Covered Calls Position
The simultaneous buy/write transaction was as follows:
4/9/2025 Bought 200 shares of Merck & Co. stock @ $80.24 per share.  
4/9/2025 Sold 2 MRK April 17th, 2025 $75.00 Call options @ $6.00 per share.  The Implied Volatility of the Call options was 59.7 when this position was transacted.

Two possible overall performance results (including commissions) would be as follows:
Covered Calls Net Investment: $14,849.34
= ($80.24 - $6.00) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$1,200.00
= ($6.00 * 200 shares)
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If MRK shares assigned with stock above the $75.00 strike price at the April 17th options expiration date): -$1,048.00
= ($75.00 strike price - $80.24 stock purchase price) * 200 shares

Potential Net Profit (If MRK price is above $75.00 strike price at the 4/17/2025 options expiration): +$152.00
= (+$1,200.00 options income + $0.00 dividend income - $1,048.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.0%
= +$152.00/$14,849.34
Potential Equivalent Annualized Return-on-Investment: +46.7%
= (+$152.00/$14,849.34) * (365/8 days)