Covered Call Position Established in Amazon.com Inc.

Today a Covered Call position of only 10 days duration was established when my buy/write net debit limit order was executed at a price of $202.82.  One hundred shares of Amazon.com Inc. (ticker symbol AMZN) stock were purchased at $209.62 and 1 July 3rd, 2025 $205.00 Call option was sold at $6.80 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 $2.18 per share [$6.80 Call option premium - ($209.62 stock purchase price - $205.00 strike price)].  The probability that the Call option will be above the $205.00 strike price on the July 3rd options expiration date when this Covered Call position was established was 68.3%.

Amazon is the leading market cap company in the Consumer Discretionary sector by a very large margin.  JP Morgan's analyst noted today that Amazon will surpass Walmart this year (for the first time) as #1 in total retail sales in the U.S.  Of course, Amazon benefits tremendously in the Information Technology sector by also being #1 in revenue as the world's #1 cloud computing platform.  

There are 53 Wall Street analysts that cover Amazon.com and their average target price is $241.90 (+15.4% above today's stock purchase price).   As detailed in the chart below, Amazon passes all 20 criteria in my "Next Year Growth > P/E; and 5-Year PEG Ratio <1.4" stock screener.  Also, 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 detailed below, a potential return-on-investment result is +1.1% absolute return-on-investment (equivalent to +39.1% annualized return-on-investment for the next 10 days) if the Amazon.com Inc. share price is in-the-money (i.e. above the $205.00 strike price) and the stock is therefore assigned on its July 3rd, 2025 options expiration date. 

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

The net debit buy/write limit order was executed as follows:
6/23/2025 Bought 100 shares of Amazon.com stock @ $209.62 per share.  
6/23/2025 Sold 1 AMZN July 3rd, 2025 $205.00 Call option @ $6.80 per share.
Note: this was a simultaneous Buy/Write transaction and the Implied Volatility of the Call was 28.6 when this position was established which, as preferred, is well above the current VIX of 20.2.  

A possible overall performance result (including commissions) if this position is assigned on its 7/03/2025 options expiration date is as follows:
Amazon.com Covered Call Net Investment: $20,282.67
= ($209.62 - $6.80) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$679.33
= ($6.80 * 100 shares) - $.67 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If Amazon.com stock is above the $205.00 strike price at the July 3rd, 2025 options expiration date): -$462.00
= ($205.00 strike price - $209.62 stock purchase price) * 100 shares

Total Net Profit Potential (If AMZN is in-the-money and therefore assigned at the $205.00 strike price on its 7/03/2025 options expiration date): +$217.33
= (+$679.33 option income + $0.00 dividend income - $462.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.1%
= +$217.33/$20,282.67
Potential Equivalent Annualized-Return-on-Investment: +39.1%
= (+$217.33/$20,282.67) * (365/10 days)