June 20th, 2025 Monthly Options Expiration Results

The Covered Calls Advisor Portfolio had two Covered Calls positions (Nvidia Corporation and Pulte Group Inc.) with June 20th, 2025 monthly options expiration dates and both positions closed with their stock prices in-the-money. The Calls expired yesterday with no remaining value and the Covered Calls were closed out by the stocks being sold at their respective strike prices, so the maximum potential return-on-investment profit was achieved for both positions.  The return-on-investment results for each position is as follows:

1. Nvidia Corporation (NVDA) -- +1.6% absolute return-on-investment (equivalent to +36.6% annualized return-on-investment) for the 16 days of this investment.  This Nvidia Covered Calls position had a $134.00 strike price and it closed at $143.85 yesterday.  The most recent blog post showing the details of this position is here. 

2. Pulte Group Inc. (PHM) -- +1.5% absolute return-on-investment (equivalent to +38.4% annualized return-on-investment) for the 14 days of this investment.  This Pulte position had a $97.00 strike price and it closed at $101.47 yesterday.  The blog post showing the details of this position is here.

As always, I welcome your questions at the email address shown below on any topics related to the Covered Calls investing strategy. 

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net

Covered Call Established in Applied Materials Inc.

A short-term Covered Call position was established this afternoon in Applied Materials Inc. (ticker AMAT) with a June 27th, 2025 options expiration date.   A buy/write transaction entered at a net debit of $165.70 was executed by purchasing 100 shares of AMAT at $175.08 and simultaneously selling one June 27th, 2025 Call option at the $167.50 strike price at $9.38 per share. The time value when this Covered Call position was established was $1.80 per share = [$9.38 Call option price - ($175.08 stock price - $167.50 strike price)].  Given the Covered Calls Advisor's current cautious outlook, a moderately in-the-money Covered Call position was established.  The probability that the Call option will be in-the-money on the options expiration date was 74.4% when this transaction was executed. The Implied Volatility of this Call was 39.5 when this transaction was executed. There is no ex-dividend and no earnings report prior to the options expiration date.

Just prior to entering this order, I checked to see if the time value in the Call option was greater or less than that for the comparable Put option.  Since the time value in the Call was higher, I entered a Covered Call net debit limit order (instead of its comparable Cash-Secured Put), and about 20 minutes later it was executed.  When this transaction occurred, the maximum time value profit potential in the Call of $1.80 per share was established and the value then for the comparable Put option was only $1.56 at its bid/ask price midpoint.  

Applied Materials is a leader in the wafer fabrication equipment industry -- balanced between logic/foundry and memory markets.  The London Stock Exchange Group rates it as an 8 for their Average Score and 10 for their Optimized Score (on a scale of 1 to 10).   As shown in the table below, Applied Materials also passed every criteria in my StockRover Overall stock screener:

As shown below, a potential return-on-investment result for this Applied Materials Inc. Covered Call position is +1.1% absolute return-on-investment in 10 days (equivalent to a +39.5% annualized return-on-investment if the position is assigned on the June 27th, 2025 options expiration.

  

Applied Materials Inc. -- New Covered Call Position Established

The $165.70 net debit buy/write limit order was transacted as follows:
6/17/2025 Bought 100 AMAT shares @ $175.08
6/17/2025 Sold 1 AMAT June 27th, 2025 $167.50 Call option @ $9.38 per share.
Note: as is often the case, these Call options were transacted slightly below the midpoint of the $9.25/$9.60 bid/ask spread.

A possible overall performance result (including commissions) would be as follows:
Covered Call Cost Basis: $16,570.67
= ($175.08 - $9.38) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$937.33
= ($9.38 * 100 shares) - $.67 commission
(b) Dividend Income (If AMAT stock assigned on the June 27th, 2025 options expiration date): $0.00
(c) Capital Appreciation (If AMAT stock is above $167.50 strike price and therefore assigned on the June 27th options expiration): -$758.00
= ($167.50 - $175.08) * 100 shares

Total Net Profit (If stock assigned on the 6/27/2025 options expiration date): +$179.33
= (+$937.33 option income + $0.00 dividend income - $758.00 capital appreciation)

Potential Absolute Return-on-Investment (If stock assigned on June 27th, 2025 options expiration date): +1.1%
= +$179.33/$16,570.67
Potential Equivalent Annualized Return-on-Investment: +39.5%
= (+$179.33/$16,570.67) *(365/10 days)

These returns will be achieved as long as the stock is above the $167.50 strike price on the June 27th options expiration date.  If the stock declines below the strike price, the breakeven price of $165.70 ($175.08 - $9.38) provides 5.4% downside protection below today's stock purchase price.

June 13th, 2025 Weekly Options Expiration Results

The Covered Calls Advisor Portfolio had three Covered Calls positions with a June 13th, 2025 options expiration date.  All three positions (Amazon.com Inc., Merck & Co. Inc., and Nvidia Corporation) were closed out so their Calls expired and the shares were called away (i.e. sold) at their respective strike prices.  Each of these positions were established at moderately in-the-money strike prices and were also of short-term durations.   

A summary of the results for each of these three positions are as follows:

1. Amazon.com Inc. (AMZN) -- +0.9% absolute return (equivalent to +33.0% annualized return-on-investment) for the 10 days of this investment.  This Covered Call position was assigned at the $200.00 strike price yesterday on its 6/13/2025 options expiration date since the stock closed in-the-money at $212.10 per share.  The original post detailing this Covered Calls position is here. 

2. Merck & Co. Inc. (MRK) -- +1.1% absolute return (equivalent to +55.5% annualized return-on-investment) for the 7 days of this investment.  This Merck Covered Calls position was assigned early on the last business day prior to its ex-dividend date (which is next Monday).  The stock price had increased from its original purchase price of $79.20 to $81.71 at yesterday's market close and the extrinsic value (i.e. time value) remaining in the Call options had declined from their original $.80 per share value to $0.00 yesterday.  So, the Calls options owner decided to exercise their Calls in order to purchase the stock at the $76.00 strike price.  The original post detailing this Covered Calls position is here. 

3. Nvidia Corporation (NVDA) -- +1.9% absolute return (equivalent to +46.5% annualized return-on-investment) for the 15 days of this investment.  This Covered Calls position was assigned at the $133.00 strike price on its June 13th options expiration date since it closed in-the-money yesterday at $141.97 per share.  The original post detailing this Covered Calls position is here. 

I welcome your feedback at my email address shown below with your questions on topics related to anything related to the Covered Calls investing strategy.

Best Wishes,

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net

Established Covered Calls in Nvidia Corporation

This afternoon a Covered Calls position was established in Nvidia Corporation (ticker NVDA).  My net buy/write limit order at $134.08 was executed by simultaneously purchasing three hundred shares at $141.99 and selling three June 27th, 2025 weekly Call options at the $136.00 strike price at $7.91 per share, which provides a $1.92 per share = [$7.91 Call options premium received - ($141.99 stock purchase price - $136.00 options strike price)] time value profit potential.  A moderately in-the-money Covered Calls positions was established with the probability that the stock will close in-the-money on the options expiration date was 71.3%.  As preferred, the next earnings report on August 27th, 2025 is after the June 27th options expiration date. 

Nvidia continues to be the leading AI-focused semiconductor company and their innovations continue.  Nvidia is my top-ranked megacap technology company since their primary customers are other IT behemoths such as Microsoft, Alphabet, Amazon, and Meta, each of whom is continuing with substantial annual increases in their capital expenditure purchases with Nvidia.  Nvidia is the primary revenue beneficiary from the huge expenditures of these megacap brethren.  

So, because of my continuing bullish outlook for Nvidia's potential growth in both revenue and earnings, this position continues my recent practice of establishing short-term in-the-money Covered Calls positions in Nvidia.  Note: I have one other Nvidia Covered Calls position expiring today which will be assigned and another Nvidia CC position that will expire next Friday. I prefer short-term (less than 30 days duration) positions since: (1) the potential annualized return-on-investment is higher for shorter-duration positions; and (2) short-term positions provide us a more frequent opportunity to re-evaluate the existing positions, so we can react quickly if news causes a substantial stock price volatility decline -- whether bullish or bearish. 

 

As detailed below, a potential return-on-investment result is +1.4% absolute return-on-investment (equivalent to +37.2% annualized return-on-investment for the next 14 days) if the Nvidia share price is in-the-money (i.e. above the $136.00 strike price) and therefore assigned on its June 27th, 2025 options expiration date.  

Nvidia Corporation (NVDA) -- New Covered Calls Position

Today's buy/write net limit order transaction was as follows:
6/13/2025 Bought 300 Nvidia Corporation shares at $141.99.

6/13/2025 Sold 3 NVDA 6/27/2025 $136.00 Call options @ $7.91 per share.  The Implied Volatility of these Calls was 37.8% when this position was established.  

A possible overall performance result (including commissions) for this Nvidia Corporation Covered Calls position is as follows:
Covered Calls Net Investment: $40,226.01
= ($141.99 - $7.91) * 300 shares + $2.01 commission

Net Profit:
(a) Options Income: +$2,370.99
= ($7.91 * 300 shares) - $2.01 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 300 Nvidia shares assigned at the $136.00 strike price at expiration): -$1,797.00
+($136.00 strike price - $141.99 stock purchase price) * 300 shares

Total Net Profit Potential (If 300 Nvidia shares in-the-money and therefore assigned at the $136.00 strike price at the options expiration date): +$573.99
= (+$2,370.99 options income + $0.00 dividend income - $1,797.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.4%
= +$573.99/$40,226.01
Potential Annualized Return-on-Investment: +37.2%
= (+$573.99/$40,226.01) * (365/14 days)

Established Covered Calls in Merck & Co. Inc.

This afternoon a Covered Calls position was established in Merck & Co. Inc. (ticker MRK) with the purchase of 300 shares at $79.20 per share and three June 27th, 2025 weekly Call options were sold for $4.00 per share at the $76.00 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 6/27/2025 options expiration date was 73.2%.  

In addition to the $.80 potential time value decay profit at assignment for this position, Merck also goes ex-dividend at $.81 per share (4.1% dividend yield) on June 16th which is prior to the June 27th 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 July 29th, 2025 is after the June 27th options expiration date.

Merck met all criteria in my Key Metrics stock screener as shown below: 

 
Two potential return-on-investment results are: (a) +1.1% absolute return-on-investment (equivalent to +55.5% annualized return-on-investment for the next 7 days) if the stock is assigned early this Friday (on June 13th which is the last trading day prior to the June 16th, 2025 ex-dividend date); OR (b) +2.1% absolute return-on-investment (equivalent to +43.4% annualized return-on-investment over the next 18 days) if the stock is assigned on the June 27th, 2025 options expiration date. 

Merck & Co. Inc. (MRK) -- New Covered Calls Position
The simultaneous buy/write transaction was as follows:
6/9/2025 Bought 300 shares of Merck & Co. stock @ $79.20 per share.  
6/9/2025 Sold 3 MRK June 27th, 2025 $76.00 Call options @ $4.00 per share.
6/16/2025 Upcoming ex-dividend of $.81 per share.  The Implied Volatility of these Calls was 28.6 when this transaction was executed.

Two possible overall performance results (including commissions) would be as follows:
Covered Calls Net Investment: $22,562.01
= ($79.20 - $4.00) * 300 shares + $2.01 commission

Net Profit Components:
(a) Options Income: +$1,200.00
= ($4.00 * 300 shares)
(b) Dividend Income (If Merck shares assigned on 6/13/2025, the business day prior to the 6/19/2025 ex-dividend date): = +$0.00; or
(b) Dividend Income (If Merck shares assigned at the 6/27/2025 options expiration): +$243.00
= $.81 per share x 300 shares
(c) Capital Appreciation (If MRK shares assigned early on 12/16/2024): -$960.00
= ($76.00 strike price - $79.20 stock purchase price) * 300 shares; or
(c) Capital Appreciation (If MRK shares assigned with stock above the $76.00 strike price at the June 27th options expiration date): -$960.00
= ($76.00 - $79.20) * 300 shares

1. Potential Net Profit (If Merck shares assigned on the June 16th ex-dividend date): +$240.00
= (+$1,200.00 options income + $0.00 dividend income - $960.00 capital appreciation)
2. Potential Net Profit (If MRK price is above $76.00 strike price at the June 27th options expiration): +$483.00
= (+$1,200.00 options income + $243.00 dividend income - $960.00 capital appreciation)

1. Absolute Return-on-Investment (If Merck shares assigned early on the June 16th, 2025 ex-dividend date): +1.1%
= +$240.00/$22,562.01
Equivalent Annualized Return-on-Investment (If assigned early): +55.5%
= (+$240.00/$22,562.01) * (365/7 days)

2. Absolute Return-on-Investment (If Merck price is above the $76.00 strike price at the June 27th options expiration): +2.1%
= +$483.00/$22,562.01
Equivalent Annualized Return-on-Investment (If assigned on the 6/27/2025 options expiration date): +43.4%
= (+$483.00/$22,562.01) * (365/18 days)

At least eight of the nine metrics used in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet must be 'YES' prior to establishing a position.  As shown below for this Merck &Co. Inc. position, all nine criteria are met.

Established Covered Call Position in UnitedHealth Group Inc.

Last Friday on its options expiration date, my Covered Call in UnitedHealth Group closed in-the-money so the maximum profit potential from this position was achieved.  Since UNH has an upcoming ex-dividend of $2.21 on June 16th, 2025 and since it met the criteria of my dividend capture strategy, I decided to establish a new Covered Call position in UnitedHealth Group Inc. (ticker UNH).  

Early in this morning's trading session, one hundred shares were purchased at $303.76 and one June 27th, 2025 Call option was sold at the $290.00 strike price at $16.87 per share--a buy/write net debit transaction of $286.89 per share which provides a maximum $3.11 per share time value profit potential.  The probability of the Call being in-the-money on the options expiration date was 74.1% when this transaction occurred. The upcoming dividend is $2.21 per share (2.9% annual dividend yield) on June 16th which is prior to the June 27th options expiration date, so this dividend is included in the potential return-on-investment results shown below.  Fortunately, there is no UNH quarterly earnings report prior to the 6/27/2025 options expiration date. 

Two potential return-on-investment results for this UnitedHealth Group Inc. Covered Call position are as follows: (a) +1.1% absolute return-on-investment (equivalent to +56.4% annualized return-on-investment) for the next 7 days if the stock is assigned early on the last business day prior to the June 16th ex-dividend date; or (b) +1.9% absolute return-on-investment (equivalent to +37.6% annualized return-on-investment) for the next 18 days if the stock is instead assigned on its June 27th, 2025 options expiration date.

 
UnitedHealth Group Inc. (UNH) -- New Covered Call Position 

The Buy/Write transaction was as follows:
6/9/2025 Bought 100 shares of UnitedHealth Group @ $303.76 per share.  
6/9/2025 Sold 1 UNH June 27th, 2025 $290.00 Call option @ $16.87 per share.  The Implied Volatility of the Calls was 31.0 when this position was established.

6/16/2025 Upcoming ex-dividend of $2.21 per share.  

Two possible overall performance results (including commissions) for this UnitedHealth Group Covered Call position are as follows: 

Covered Call Net Investment: $28,689.67

= ($303.76 - $16.87) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$1,686.33
= ($16.87 * 100 shares) - $.67 commission
(b) Dividend Income: $221.00

= ($2.21 per share x 100 shares)
(c) Capital Appreciation (If shares assigned at $290.00 strike price at the 6/27/2025 options expiration date): -$1,376.00
+($290.00 strike price - $303.76 stock purchase price) * 100 shares

1. Total Net Profit [If stock shares assigned at $290.00 strike price this Friday (the last business day prior to the June 16th ex-dividend date)]: +$310.33

= (+$1,686.33 options income + $0.00 dividend income - $1,376.00 capital appreciation); or

2. Total Net Profit (If stock shares assigned at $290.00 strike price at the 6/27/2025 options expiration date): +$531.33

= (+$1,686.33 option income + $221.00 dividend income - $1,376.00 capital appreciation)

1. Potential Absolute Return-on-Investment (if assigned early on the last trading day prior to the 6/16/2025 ex-dividend): +1.1%

= +$310.33/$28,689.67

Potential Annualized Return-on-Investment: +56.4%

= (+$310.33/$28,689.67) * (365/7 days); or

2. Potential Absolute Return-on-Investment (if assigned on the 6/27/2025 options expiration date): +1.9%

= +$531.33/$28,689.67

Potential Annualized Return-on-Investment: +37.6%

= (+$531.33/$28,689.67) * (365/18 days)

June 6th, 2025 Weekly Options Expiration Results

One of the many appealing features of the Covered Calls investing strategy is that we can easily calculate the potential return-on-investment (roi) results if the stock price were to close on the options expiration date at any possible price.  For example, I always make this calculation for the circumstance if the stock were to be in-the-money (i.e. above the Call option's strike price) on its options expiration date.  For any option chain that I am considering, this calculation provides me with the maximum potential return-on-investment result for any Covered Calls position I am contemplating establishing, and it does this in advance (i.e. before) I enter the trade. Using Schwab's Think or Swim platform I also look at the real-time probability that any particular Call option chain I'm evaluating will be assigned (i.e. close in-the-money) on its options expiration date.  Knowing both the risk (probability %) and reward (return-on-investment) for any specific Covered Calls position just prior to making a Covered Calls investment is invaluable for making decisions that are consistent with my personal risk tolerance profile.

Furthermore, since Covered Calls and 100% Cash-Secured Puts are synthetically equivalent strategies, just prior to entering the trade order, we should also evaluate whether a Covered Calls or a Cash-Secured Puts order would be preferable.  This is easily done by comparing the time value (i.e. extrinsic value) of the comparable Calls or Puts position to determine which one has a higher value and therefore a higher potential return-on-investment.  In recent history, Calls have normally had the higher time value which is why I almost always choose to enter Covered Calls orders (even when the circumstance occurs that the time value between comparable Calls and Puts are basically equal).      

The Covered Calls Advisor Portfolio had two Covered Calls positions with June 6th, 2025 weekly options expirations.  Both positions closed on this options expiration date yesterday with their stock prices well in-the-money (i.e. above the strike price), so the Calls expired with no remaining value and the Covered Calls were closed out with the stocks sold at their respective strike prices; and their maximum potential return-on-investment results on the options expiration date were achieved.  A summary of the return-on-investment results for these positions are as follows:

1. T-Mobile US Inc. (TMUS) -- +1.4% absolute return-on-investment (equivalent to +30.8% annualized return-on-investment) for the 16 days of this investment.  This T-Mobile position had a $232.50 strike price and it closed at $245.86 yesterday.  The blog post showing the details of this position on the day the position was originally established is here. 

2. UnitedHealth Group Inc. (UNH) -- +2.5% absolute return-on-investment (equivalent to +64.1% annualized return-on-investment) for the 14 days of this investment.  This UnitedHealth Group position had a $280.00 strike price and it closed yesterday at $303.22.  The blog post showing the details of this position on the day the position was originally established is here.

To read some of my prior posts related to my decision-making processes for Covered Calls investing, click on the "Covered Calls Processes" link shown in the "Categories" section in the right sidebar of the homepage (which is here).  One posted article there that readers have found especially helpful and that you might begin with titled "Exploiting Our Covered Calls Investing "Edges"' is here.  

As always, I encourage you to email any of your comments or questions related to the Covered Calls investing strategy to the email address shown below. 

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net

Established Covered Calls Position in Pulte Group Inc.

A short-term buy/write limit order in Pulte Group Inc. (ticker PHM) was executed this afternoon at the Covered Calls Advisor's net debit price of $95.75 per share. Two hundred shares were purchased at $100.60 and two June 20th, 2025 Call options were sold for $4.85 per share at the $97.00 strike price, a time value profit potential of $1.25 = [$4.85 options premium - ($100.60 stock price - $97.00 strike price)] per share.  This position is in-the-money since the probability that the position will be in-the-money on its June 20th options expiration date was 70.4% when this transaction was executed today.  The probability that this position will expire in-the-money on the 6/20/2025 options expiration date was 70.4% when this position was established.  Also, the next quarterly earnings report on July 22nd, 2025 is after this month's June 20th options expiration date.  

This position uses the Covered Calls Advisor's Dividend Capture Strategy (see here).  Pulte has an upcoming quarterly ex-dividend of $.22 per share that goes ex-dividend on June 17th, 2025 which is prior to the June 20th, 2025 options expiration date.  This dividend increases the potential annualized return-on-investment results (compared with a similar position without a dividend capture potential) and the dividend is included in the detailed potential return-on-investment calculations shown below.  Either an early assignment on the last business day prior to the ex-dividend date or on the June 20th, 2025 options expiration date would be a desirable result given the annualized return-on-investment potential upon assignment for either outcome. 

As shown in my S&P 500 Price Potential stock screener results below, Pulte Group achieves every criteria.  

As detailed below, two potential return-on-investment results are: 

•  +1.3% absolute return (equivalent to +43.1% annualized return-on-investment for the next 11 days) if the stock is assigned early (the last business day prior to the June 17th ex-dividend date); OR 

• +1.5% absolute return (equivalent to +38.4% annualized return over the next 14 days) if the stock is assigned on the June 20th, 2025 options expiration date.

Pulte Group Inc. (PHM) -- New Covered Calls Position
The simultaneous buy/write transaction was:
6/6/2025 Bought 200 Pulte Group Inc. shares @ $100.60.
6/6/2025 Sold 2 Pulte 6/20/2025 $97.00 Call options @ $4.85 per share.
Note: the Implied Volatility of the Call options was 33.6 when this position was established.
6/17/2025 Upcoming quarterly ex-dividend of $.22 per share.

Two possible overall performance results (including commissions) for this Pulte Group Covered Calls position are as follows:
Covered Calls Cost Basis: $19,151.34
= ($100.60 - $4.85) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$968.66
= ($4.85 * 200 shares) - $1.34 commission
(b) Dividend Income (If options exercised early on June 16th, the last business day prior to the June 17th, 2025 ex-div date): +$0.00; or
(b) Dividend Income (If Pulte stock assigned on the June 20th, 2025 options expiration -- so the dividend is captured): +$44.00
= ($.22 dividend per share x 200 shares)

(c) Capital Appreciation (If Pulte Call options assigned early on June 17th): -$720.00
+($97.00 - $100.60) * 200 shares; or
(c) Capital Appreciation (If shares assigned at $97.00 strike price at options expiration): -$720.00
+($97.00 - $100.60) * 200 shares

1. Total Net Profit (If options exercised early): +$248.66

= (+$968.66 options income + $0.00 dividend income - $720.00 capital appreciation); or

2. Total Net Profit (If Pulte shares assigned at $97.00 at the June 20th, 2025 expiration): +$292.66

= (+$968.66 options income + $44.00 dividend income - $720.00 capital appreciation)

1. Absolute Return-on-Investment [If option exercised on business day prior to the June 17th ex-dividend date]: +1.3%

= +$248.66/$19,151.34

Annualized Return-on-Investment (If option exercised early): +43.1%

= (+$248.66/$19,151.34) * (365/11 days); or

2. Absolute Return-on-Investment (If Pulte shares assigned on the June 20th, 2025 options expiration date): +1.5%

= +$292.66/$19,849.34

Annualized Return-on-Investment (If Pulte shares assigned at $97.00 at the June 20th, 2025 expiration): +38.4%

= (+$292.66/$19,849.34) * (365/14 days)

Either outcome would provide a good return-on-investment result for this Pulte Group Covered Calls investment.  These returns will be achieved as long as the stock is above the $97.00 strike price at assignment.  However, if the stock declines below the strike price, a breakeven price of $95.53 = ($100.60 stock price - $4.85 Call options price - $.22 dividend) provides 5.0% downside protection below today's stock purchase price.

At least eight of the nine metrics used in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet must be 'YES' prior to establishing a position.  As shown below with this Pulte Group position, all nine criteria are met.

Early Assignment of Covered Calls Position in Bank of America Corporation

I was notified by Schwab via email early this morning that the five Bank of America Corporation (ticker BAC) June 13th, 2025 Call options were exercised yesterday.  BofA's stock price increased slightly from $43.88 when this position was established to $44.12 at yesterday's market close, the original $.24 time value in the Calls when the position was established had declined on yesterday's market closer to $0.00.  So, with seven days remaining until the June 13th options expiration date, the owner of these Calls exercised their option to buy the 500 shares at the $42.50 strike price in order to receive today's $.26 per share ex-dividend.  Although I will not receive the ex-dividend, I am pleased with the +33.7% annualized-return-on-investment (aroi) result achieved since it slightly exceeds the maximum aroi that might have been achieved if this position instead remained in-the-money and would therefore be assigned on next Friday's (June 13th, 2025) options expiration date.   

The post when this Bank of America Corp. Covered Calls position was originally established is here.  As detailed below, the return-on-investment result for this Bank of America Covered Calls position was +0.6% absolute return in 7 days (equivalent to a +33.7% annualized return-on-investment).

Bank of America Corporation (BAC) -- Covered Calls Position Closed by Early Assignment

The buy/write transaction was as follows:
5/30/2025 Bought 500 shares of Bank of America Corp. stock @ $43.88 per share 
5/30/2025 Sold 5 BAC June 13th, 2025 $42.50 Call options @ $1.66 per share
Note: The Implied Volatility of these Calls was 23.3 when this position was established.
6/6/2023 Five Bank of America Calls were exercised on the last business day prior to their June 6th, 2025 ex-dividend date, so the Call options expired and the 500 Bank of America shares were sold at the $42.50 strike price.

The overall performance results (including commissions) are as follows:
Covered Calls Cost Basis: $21,113.35
= ($43.88 - $1.66) * 500 shares + $3.35 commission

Net Profit Components:
(a) Options Income: +$826.65
= ($1.66 * 500 shares) - $3.35 commission
(b) Dividend Income (500 shares assigned on 6/5/2025, the last business day prior to the 6/6/2025 ex-dividend date): = +$0.00
(c) Capital Appreciation (BAC shares assigned early on 6/5/2025): -$690.00
= ($42.50 strike price - $43.88 stock purchase price) * 500 shares

Net Profit (Bank of America shares assigned on 6/5/2025, the day prior to the June 6th ex-dividend date): +$136.65
= (+$826.65 options income + $0.00 dividend income - $690.00 capital appreciation)

Absolute Return-on-Investment: +0.6%
= +$136.65/$21,113.35
Annualized Return-on-Investment: +33.7%
= (+$136.65/$21,113.35) * (365/7 days)

Early Assignment of Covered Call Position in Home Depot Inc.

I was notified by Schwab via email early this morning that the one Home Depot Inc. (ticker HD) June 13th, 2025 Call option was exercised yesterday.  Despite the fact that the stock price has increased only very slightly (from $369.71 purchase price to $370.10 at yesterday's market close), the original Call option time value has decreased from the original $3.50 time value in the Call option when the position was established to only about $.25 at yesterday's market close.  So, with eight days remaining until the June 13th options expiration date, the owner of this Call exercised their option to buy the 100 shares at the $362.50 strike price in order to receive today's $2.30 per share ex-dividend.  Although I will not receive the ex-dividend, I am pleased with the +44.4% annualized-return-on-investment (aroi) result achieved since it exceeds the maximum +36.8% aroi that might have been achieved if this position instead remained in-the-money and would therefore be assigned on its June 13th, 2025 options expiration date.   

The post when this Home Depot Inc. Covered Call position was originally established is here.  As detailed below, the return-on-investment result for this Home Depot Covered Call position was +1.0% absolute return in 8 days (equivalent to a +44.4% annualized return-on-investment).

Home Depot Inc. (C) -- Covered Call Position Closed by Early Assignment

The simultaneous buy/write transaction was:
4/16/2025 Bought 100 Home Depot Inc. shares @ $369.71.
4/16/2025 Sold 1 Home Depot 6/13/2025 $362.50 Call option @ $10.71 per share.
6/5/2025 One Home Depot Call was exercised on the last business day prior to its June 5th, 2025 ex-dividend date, so the Call expired and the 100 Home Depot shares were sold at the $362.50 strike price.

The overall performance result (including commissions) for this Home Depot Covered Call position is as follows:
Covered Calls Cost Basis: $35,900.67
= ($369.71 - $10.71) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$1,070.33
= ($10.71 * 100 shares) - $.67 commission
(b) Dividend Income (HD Call option exercised early on June 4th, 2025, the business day prior to the June 5th ex-div date): +$0.00

(c) Capital Appreciation (Early Assignment): -$721.00
+($362.50 strike price - $369.71 stock purchase price) * 100 shares

Total Net Profit: +$349.33

= (+$1,070.33 option income + $0.00 dividend income - $721.00 capital appreciation)

Absolute Return-on-Investment: +1.0%

= +$349.33/$35,900.67

Annualized Return-on-Investment: +44.4%

= (+$349.33/$35,900.67) * (365/8 days)

Established Covered Calls in Nvidia Corporation

Today a Covered Calls position was established in Nvidia Corporation (ticker NVDA).  This morning I established a net buy/write limit order at $131.88 by purchasing three hundred shares at $140.23 and selling three June 20th, 2025 monthly Call options at the $134.00 strike price at $8.35 per share, which provides a $2.12 per share = [$8.35 Call options premium received - ($140.23 stock purchase price - $134.00 options strike price)] time value profit potential.  A moderately in-the-money Covered Calls positions was established with the probability that the stock will close in-the-money on the options expiration date was 71.0%.  As preferred, the next earnings report on August 27th, 2025 is after the June 13th options expiration date. 

Nvidia continues to be the leading AI-focused semiconductor company and their innovations continue.  For example, just this past month they announced a new product category, the DGX Spark AI-based workstation for software developers and data scientists that will incorporate their newest Blackwell chip technology.  Nvidia is my top-ranked megacap technology company since their primary customers are other IT behemoths such as Microsoft, Alphabet, and Meta, each of whom is continuing with substantial annual increases in their capital expenditure purchases with Nvidia.  Think about it -- Nvidia is the primary revenue beneficiary from the huge expenditures of several of its tech megacap brethren.  

So, because of my continuing bullish outlook for Nvidia's potential growth in both revenue and earnings, this position continues my recent practice of establishing short-term in-the-money Covered Calls positions in Nvidia.  Note: I have another existing Nvidia Covered Calls position at the $133.00 strike price with a 6/13/2025 expiration date. I prefer short-term (less than 30 days duration) positions since: (1) the potential annualized return-on-investment is higher for shorter-duration positions; and (2) short-term positions provide us a more frequent opportunity to re-evaluate the existing positions, so we can react quickly if news causes a substantial stock price volatility decline -- whether bullish or bearish. 

 

As detailed below, a potential return-on-investment result is +1.6% absolute return-on-investment (equivalent to +36.6% annualized return-on-investment for the next 16 days) if the Nvidia share price is in-the-money (i.e. above the $134.00 strike price) and therefore assigned on its June 20th, 2025 options expiration date.  

Nvidia Corporation (NVDA) -- New Covered Calls Position

Today's buy/write net limit order transaction was as follows:
6/4/2025 Bought 300 Nvidia Corporation shares at $140.23.

6/4/2025 Sold 3 NVDA 6/20/2025 $134.00 Call options @ $8.35 per share.  The Implied Volatility of these Calls was 38.5% when this position was established.  

A possible overall performance result (including commissions) for this Nvidia Corporation Covered Calls position is as follows:
Covered Calls Net Investment: $39,566.01
= ($140.23 - $8.35) * 300 shares + $2.01 commission

Net Profit:
(a) Options Income: +$2,502.99
= ($8.35 * 300 shares) - $2.01 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 300 Nvidia shares assigned at the $134.00 strike price at expiration): -$1,869.00
+($134.00 strike price - $140.23 stock purchase price) * 300 shares

Total Net Profit Potential (If 300 Nvidia shares in-the-money and therefore assigned at the $134.00 strike price at the options expiration date): +$633.99
= (+$2,502.99 options income + $0.00 dividend income - $1,869.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.6%
= +$633.99/$39,566.01
Potential Annualized Return-on-Investment: +36.6%
= (+$633.99/$39,566.01) * (365/16 days)

Covered Call Position Established in Amazon.com Inc.

Today my short-term buy/write net debit limit order was executed at a price of $198.20 when 100 shares of Amazon.com Inc. (ticker symbol AMZN) stock were purchased at $206.84 and 1 June 13th, 2025 $200.00 Call option was sold at $8.64 per share.  So, the potential time value profit if the stock is in-the-money and therefore closed out by assignment on the options expiration date is $1.80 per share [$8.64 Call option premium - ($206.84 stock purchase price - $200.00 strike price)].  The probability that the Call option will be above the $200.00 strike price on the June 13th options expiration date when this Covered Call position was established was 74.3%.

Amazon is the leading company in the Consumer Discretionary sector that in Technology is also the world's #1 cloud computing platform.  There are 52 Wall Street analysts that cover it and their average target price is $239.52 (+15.8% above today's stock purchase price).   The London Stock Exchange Group rates it as an 8 for their Average Score and 9 for Optimized Score (on a scale of 1 to 10).   As shown in the table below, Amazon also passed every criteria in my Quality+Value+Growth+Momentum stock screener:

Amazon.com Inc. (AMZN) -- New Covered Call Position

The net debit buy/write limit order was executed as follows:
6/3/2025 Bought 100 shares of Amazon.com stock @ $206.84 per share.  
6/3/2025 Sold 1 AMZN June 13th, 2025 $200.00 Call option @ $8.64 per share.
Note: this was a simultaneous Buy/Write transaction and the Implied Volatility of the Call was 31.0 when this position was established which, as preferred, is well above the current VIX of 17.8.  

A possible overall performance result (including commissions) if this position is assigned on its 6/13/2025 options expiration date is as follows:
Amazon.com Covered Call Net Investment: $19,820.67
= ($206.84 - $8.64) * 100 shares + $.67 commission

Net Profit Components:
(a) Options Income: +$863.33
= ($8.64 * 100 shares) - $.67 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If Amazon.com stock is above the $200.00 strike price at the June 13th, 2025 options expiration date): -$684.00
= ($200.00 strike price - $206.84 stock purchase price) * 100 shares

Total Net Profit Potential (If AMZN is in-the-money and therefore assigned at the $200.00 strike price on its 6/13/2025 options expiration date): +$179.33
= (+$863.33 options income + $0.00 dividend income - $684.00 capital appreciation)

Potential Absolute Return-on-Investment: +0.9%
= +$179.33/$19,820.67
Potential Equivalent Annualized-Return-on-Investment: +33.0%
= (+$179.33/$19,820.67) * (365/10 days)