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.