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)