Covered Call Position Established in AppLovin Corporation

This morning I established a new Covered Call position in AppLovin Corporation (ticker APP) when my buy/write net debit limit order was executed at a price of $321.40.  One hundred shares were purchased at $362.10 and 1 in-the-money August 8th, 2025 $345.00 Call option was sold at $40.70 per share.  So, the maximum potential time value profit if the stock is in-the-money and therefore closed out by assignment on the options expiration date is $23.60 per share [$40.70 Call option premium - ($362.10 stock purchase price - $345.00 strike price)].  The probability that the Call option will be above the $345.00 strike price on the August 8th options expiration date when this Covered Call position was established was 54.4%.

AppLovin is a $123 billion market cap leading global provider of software solutions for advertisers to monetize their advertising mobile applications content.  They also had a mobile gaming business which they divested themselves of just last month to focus solely on their more rapidly growing ad-tech business.  In fact, they are so successful with their ads that they are currently supply constrained in the number of new customers they can add to their platform.  But they have just released the initial version of a self-serve ads-management dashboard that will substantially enhance the rate at which they can add new customers and which will further stimulate their growth and also their profit margins.  Their visionary CEO is Adam Foroughi who was one of the co-founders of the company in 2012.  Their IPO was in 2021.  They employ highly educated machine learning research scientists with graduate degrees from top-rated universities.  

As detailed below, a potential return-on-investment result is +7.3% absolute return-on-investment (equivalent to +148.9% annualized return-on-investment for the next 18 days) if the AppLovin share price is in-the-money (i.e. above the $345.00 strike price) and the stock is therefore assigned on its August 8th, 2025 options expiration date. 

AppLovin Corporation (APP) -- New Covered Call Position

The net debit buy/write limit order was executed as follows:
7/21/2025 Bought 100 shares of AppLovin Corp. stock @ $362.10 per share.  
7/21/2025 Sold 1 APP August 8th, 2025 $345.00 Call option @ $40.70 per share.
Note: this was a simultaneous Buy/Write transaction and the Implied Volatility of the Call was an incredibly high 98.9 when this position was established.  Their next earnings report is on August 6th.  I normally avoid holding Covered Call positions with intervening earnings reports before the options expiration date because of the stock price volatility that occurs when the earnings are released.  But given the extremely high Implied Volatility, I believe the risk/reward is attractive in this case; and I can always decide to exit the position completely prior to August 6th if I believe conditions at that time warrant action.   

A possible overall performance result (including commissions) if this position is assigned on its 8/8/2025 options expiration date is as follows:
AppLovin Covered Call Net Investment: $32,140.67
= ($362.10 - $40.70) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$4,069.33
= ($40.70 * 100 shares) - $.67 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If AppLovin stock is above the $345.00 strike price at the August 8th, 2025 options expiration date): -$1,710.00
= ($345.00 strike price - $362.10 stock purchase price) * 100 shares

Total Net Profit Potential (If APP is in-the-money and therefore assigned at the $345.00 strike price on its 8/8/2025 options expiration date): +$2,359.33
= (+$4,069.33 option income + $0.00 dividend income - $1,710.00 capital appreciation)

Potential Absolute Return-on-Investment: +7.3%
= +$2,359.33/$32,140.67
Potential Equivalent Annualized-Return-on-Investment: +148.9%
= (+$2,359.33/$32,140.67) * (365/18 days)  

Established Covered Calls in Morgan Stanley

During the first half hour of trading this morning, a Covered Calls position was established in Morgan Stanley (ticker symbol MS) when 300 shares were purchased at $140.46 and 3 August 8th, 2025 Call options were sold at $4.76 per share at the $137.00 strike price.  The net debit limit order at $135.70 was executed, so the time value was $1.30 per share [$4.76 Call options premium - ($140.46 stock purchase price - $137.00 strike price)]. There is also an upcoming quarterly ex-dividend of $1.00 per share on July 31st (an increase of 8.1% from last year and a current annual dividend yield of 2.8%), so two potential return-on-investment results for this position, as detailed below, include the possibility of early assignment because the ex-dividend is prior to the August 8th, 2025 options expiration date.  Morgan Stanley's Q2 2025 earnings report last Wednesday was very positive which also means there will be no new earnings report prior to the options expiration date.  From a technical indicators viewpoint, Market Edge's current rating of Morgan Stanley is "Strong Buy"; and my Stock Rover platform has identified zero red flags for Morgan Stanley.  An in-the-money Covered Calls position was established when the probability of the stock closing in-the-money (and therefore being assigned) on the 8/8/2025 options expiration date was 69.3%.  

Most companies in the Financial Sector provide only modest growth prospects, but they often provide good annual dividend yields (such as the 2.8% annual dividend yield for this Morgan Stanley position).  Consequently, the Covered Calls Advisor targets opportunities to use the Dividend Capture Strategy in all Financial Sector Covered Calls positions.  This new August 8th, 2025 Morgan Stanley Covered Calls position continues the Dividend Capture Strategy of often selling in-the-money monthly Covered Calls for one of six megacap U.S. banks (Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley, and Wells Fargo) for each options expiration month:
(JPMorgan Chase quarterly for Jan, Apr, July, and Oct options expirations;
Citigroup, Morgan Stanley, and/or Wells Fargo for Feb, May, Aug, and Nov options expirations; and Bank of America and/or Goldman Sachs for Mar, Jun, Sep, and Dec options expirations). 

The goal of these monthly Covered Calls in these banks is to both provide an opportunity to either: (1) potentially capture the quarterly dividend payment and if the stock price remains above the strike price at options expiration, the maximum possible return-on-investment result on the options expiration date would be achieved; or (2) have the stock assigned early on the last trading day prior to the ex-dividend date in which case the Covered Calls Advisor is usually very pleased since the Dividend Capture Strategy criteria are designed such that most often the annualized return-on-investment for early assignment is somewhat greater than what would be achieved if the stock was instead assigned on its options expiration date (which is the case for this Morgan Stanley position).  So far, applying this approach has provided attractive annualized return results -- significantly better than would be achieved if Covered Calls positions for these bank stocks were instead held in the Covered Calls Advisor Portfolio in the other two non-dividend paying months each quarter.   

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

•  +1.0% absolute return (equivalent to +34.8% annualized return-on-investment for the next 10 days) if the stock is assigned early (on the last business day prior to the July 31st, 2025 ex-dividend date); OR 

• +1.7% absolute return (equivalent to +34.3% annualized return-on-investment over the next 18 days) if the stock is assigned on the August 8th, 2025 options expiration date.

Morgan Stanley (MS) -- New Covered Calls Position
The buy/write transaction was:
7/21/2025 Bought 300 Morgan Stanley shares @ $140.46
7/21/2025 Sold 3 Morgan Stanley 8/8/2025 $137.00 Call options @ $4.76
Note: the Implied Volatility of the Call options was 21.9 when this buy/write transaction was executed.
7/31/2025 Upcoming quarterly ex-dividend of $1.00 per share

Two possible overall performance results (including commissions) for this Morgan Stanley Covered Calls position are as follows:
Covered Calls Cost Basis: $40,712.01
= ($140.46 - $4.76) * 300 shares + $2.01 commission

Net Profit Components:
(a) Options Income: +$1,425.99
= ($4.76 * 300 shares) - $2.01 commission
(b) Dividend Income (If option exercised early on July 30th, the last business day prior to the July 31st ex-div date): +$0.00; or
(b) Dividend Income (If Morgan Stanley stock assigned at the August 8th, 2025 expiration): +$300.00         

= ($1.00 dividend per share x 300 shares)

(c) Capital Appreciation (If Morgan Stanley Call options assigned early on July 31st): -$1,038.00
+($137.00 strike price - $140.46 stock purchase price) * 300 shares; or
(c) Capital Appreciation (If shares assigned at $137.00 strike price at the 8/8/2025 options expiration): -$1,038.00
+($137.00 - $140.46) * 300 shares

1. Total Net Profit [If option exercised early on the last business day prior to the July 31st ex-dividend date)]: +$387.99

= (+$1,425.99 options income +$0.00 dividend income -$1,038.00 capital appreciation); or

2. Total Net Profit (If Morgan Stanley shares assigned at $137.00 strike price at the August 8th, 2025 expiration): +$687.99

= (+$1,425.99 + $300.00 - $1,038.00)

1. Potential Absolute Return-on-Investment (If option exercised early on July 31st): +1.0%

= +$387.99/$40,712.01

Potential Annualized Return-on-Investment: +34.8%

= (+$387.99/$40,712.01) * (365/10 days); or

2. Potential Absolute Return-on-Investment (If Morgan Stanley shares assigned at $137.00 at the August 8th, 2025 options expiration): +1.7%

= +$687.99/$40,712.01

Potential Annualized Return-on-Investment (If Morgan Stanley shares assigned at the August 8th options expiration date): +34.3%

= (+$687.99/$40,712.01) * (365/18 days)

Either outcome would provide an attractive return-on-investment result for this Morgan Stanley investment.  These returns will be achieved as long as the stock is above the $137.00 strike price at assignment.  If the stock declines below the strike price, the breakeven price of $132.70 ($140.46 - $4.76 - $3.00) provides 5.5% 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 Morgan Stanley position, all nine criteria were met.

July 18th, 2025 Monthly Options Expiration Results

The Covered Calls Advisor Portfolio had five Covered Calls positions with July 18th, 2025 monthly options expirations and all five 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 these five positions.  The return-on-investment details for each position is as follows:

1. Amazon.com Inc. (AMZN) -- +1.5% absolute return-on-investment (equivalent to +37.4% annualized return-on-investment) for the 15 days of this investment.  This Amazon Covered Calls position had a $215.00 strike price and it closed at $226.13 yesterday. 

2. Dell Technologies Inc. (DELL) -- +1.4% absolute return-on-investment (equivalent to +27.4% annualized return-on-investment) for the 18 days of this investment.  This Dell position had a $115.00 strike price and it closed at $131.24 yesterday.  

3. iShares Bitcoin ETF (IBIT) -- +1.7% absolute return-on-investment (equivalent to +37.4% annualized return-on-investment) for the 17 days of this investment.  This iShares Bitcoin ETF position had a $58.00 strike price and it closed at $66.68 yesterday.  

4. Halozyme Therapeutics Inc. (HALO) -- +2.2% absolute return-on-investment (equivalent to +31.4% annualized return-on-investment) for the 25 days of this investment.  This Halozyme position had a $50.00 strike price and it closed at $56.45 yesterday.  

5. Merck & Co. Inc. (MRK) -- +1.1% absolute return-on-investment (equivalent to +27.7% annualized return-on-investment) for the 15 days of this investment.  This Merck position had a $79.00 strike price and it closed at $79.96 yesterday.  

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

Established Covered Calls in iShares Bitcoin ETF

This morning I established a short-term Covered Calls position in iShares Bitcoin ETF (ticker IBIT).  My net buy/write limit order at $63.98 was executed by simultaneously purchasing four hundred shares at $67.45 and selling four July 31st, 2025 end-of-month Call options at the $65.00 strike price at $3.27 per share, which provides a $1.02 per share = [$3.27 Call options premium received - ($67.25 stock purchase price - $65.00 options strike price)] maximum time value profit potential.  

This new IBIT Covered Calls position expires on the 7/31/2025 end-of-month options expiration date which is a Thursday.  If assigned, the cash received from the closing out (i.e. assignment) of this position will be available for reinvestment in another Covered Calls position on the following trading day which is a Friday -- so I won't have to wait over the weekend until Monday to deploy the cash as is the norm since most options expiration dates occur on Fridays.  

A moderately in-the-money Covered Calls positions was established and the probability that these ETF shares will close in-the-money on the options expiration date was 67.4%.  This position represents a continuation for approximately two more weeks of my current Covered Calls position in IBIT -- a position that will be assigned on today's options expiration date. 

The iShares Bitcoin ETF (ticker IBIT) is the largest Bitcoin ETF and it provides direct exposure to the spot price of Bitcoin. It was launched in January 2024 as one of the first U.S.-listed spot Bitcoin ETFs approved by the SEC.  IBIT is a good way for us retail investors to gain exposure to Bitcoin since it holds actual Bitcoin in custody (not futures contracts), thus enabling us to gain exposure to Bitcoin’s price movements through a traditional brokerage account without having to buy or store Bitcoin ourselves (and at a reasonably low annual management fee of .25%).      

As detailed below, a potential return-on-investment result is +1.6% absolute return-on-investment (equivalent to +44.5% annualized return-on-investment for the next 13 days) if the iShares Bitcoin ETF share price is in-the-money (i.e. above the $65.00 strike price) and therefore assigned on its Thursday July 31st, 2025 options expiration date.  

iShares Bitcoin ETF (IBIT) -- New Covered Calls Position

Today's buy/write net limit order transaction was as follows:
7/18/2025 Bought 400 iShares Bitcoin ETF shares at $67.25.

7/18/2025 Sold 4 IBIT 7/31/2025 $65.00 Call options @ $3.27 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 iShares Bitcoin ETF Covered Calls position is as follows:
Covered Calls Net Investment: $25,594.68
= ($67.25 - $3.27) * 400 shares + $2.68 commission

Net Profit:
(a) Options Income: +$1,305.32
= ($3.27 * 400 shares) - $2.68 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 400 iShares Bitcoin ETF shares assigned at the $65.00 strike price at expiration): -$900.00
+($65.00 strike price - $67.25 stock purchase price) * 400 shares

Total Net Profit Potential (If 400 IBIT shares are in-the-money and therefore assigned at the $65.00 strike price at the options expiration date): +$405.32
= (+$1,305.32 options income + $0.00 dividend income - $900.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.6%
= +$405.32/$25,594.68
Potential Annualized Return-on-Investment: +44.5%
= (+$405.32/$25,594.68) * (365/13 days)

Covered Calls Position Established in Amazon.com Inc.

This morning my buy/write net debit limit order was executed at a price of $209.28 when 200 shares of Amazon.com Inc. (ticker symbol AMZN) stock were purchased at $223.60 and 2 August 1st, 2025 $212.50 Call options were sold at $14.32 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 $3.22 per share [$14.32 Call options premium - ($223.60 stock purchase price - $212.50 strike price)].  The probability that the Calls will be above the $212.50 strike price on the 8/1/2025 options expiration date when this Covered Calls position was established was 72.2%.

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

The net debit buy/write limit order was executed as follows:
7/17/2025 Bought 200 shares of Amazon.com stock @ $223.60 per share.  
7/17/2025 Sold 2 AMZN August 1st, 2025 $212.50 Call options @ $14.32 per share.
Note: this was a simultaneous Buy/Write transaction and the Implied Volatility of the Calls was 40.5 when this position was established which, as preferred, is well above the current VIX of 16.8.  

A possible overall performance result (including commissions) if this position is assigned on its 8/1/2025 options expiration date is as follows:
Covered Calls Net Investment: $41,857.34
= ($223.60 - $14.32) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$2,862.66
= ($14.32 * 200 shares) - $1.34 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If Amazon.com stock is above the $212.50 strike price at the August 1st, 2025 options expiration date): -$2,220.00
= ($212.50 strike price - $223.60 stock purchase price) * 200 shares

Total Net Profit Potential (If assigned at the $212.50 strike price on the Aug. 1st options expiration date): +$642.66
= (+$2,862.66 options income + $0.00 dividend income - $2,220.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.5%
= +$642.66/$41,857.34
Potential Equivalent Annualized-Return-on-Investment: +37.4%
= (+$642.66/$41,857.34) * (365/15 days)

Established Covered Calls in Nvidia Corporation

This morning at 10:03am ET, 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 August 1st 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, Meta, and Oracle 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. 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 -- whether bullish or bearish. 

 

As detailed below, a potential return-on-investment result is +2.0% absolute return-on-investment (equivalent to +42.8% annualized return-on-investment for the next 17 days) if the Nvidia share price is in-the-money (i.e. above the $162.50 strike price) and therefore assigned on its August 1st, 2025 options expiration date.  

Nvidia Corporation (NVDA) -- New Covered Calls Position

Today's buy/write net limit order transaction was as follows:
7/15/2025 Bought 300 Nvidia Corporation shares at $169.42.

7/15/2025 Sold 3 NVDA 8/1/2025 $162.50 Call options @ $10.10 per share.  The Implied Volatility of these Calls was 40.3% 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: $47,798.01
= ($169.42 - $10.10) * 300 shares + $2.01 commission

Net Profit:
(a) Options Income: +$3,027.99
= ($10.10 * 300 shares) - $2.01 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 300 Nvidia shares assigned at the $162.50 strike price at expiration): -$2,076.00
+($162.50 strike price - $169.42 stock purchase price) * 300 shares

Total Net Profit Potential (If 300 Nvidia shares in-the-money and therefore assigned at the $162.50 strike price at the options expiration date): +$951.99
= (+$3,027.99 options income + $0.00 dividend income - $2,076.00 capital appreciation)

Potential Absolute Return-on-Investment: +2.0%
= +$951.99/$47,798.01
Potential Annualized Return-on-Investment: +42.8%
= (+$951.99/$47,798.01) * (365/17 days)

Established Covered Call in Lowe's Companies Inc.

Today, a buy/write net debit limit order in Lowe's Companies Inc. (ticker LOW) was executed at the Covered Calls Advisors' net debit price of $212.80 per share.  One hundred shares were purchased at $220.78 and simultaneously one August 1st, 2025 Call option was sold for $7.98 at the $215.00 strike price, therefore a maximum time value profit potential of $2.20 per share = [$7.98 options premium - ($220.78 stock price - $215.00 strike price)] for the Call option portion of this trade was established.  

This position uses the Covered Calls Advisor's Dividend Capture Strategy (see details here) since Lowe's has an upcoming quarterly ex-dividend of $1.20 per share on July 23rd, 2025 which is prior to the August 1st options expiration date.  This is equivalent to an absolute annual dividend yield of 2.2% and an equivalent annualized dividend yield of 11.0% = [($1.20/$220.78) x (365/18 days to expiration)].  This dividend is included in the detailed return-on-investment calculations below.  Either an early assignment on the day prior to the ex-dividend date or on the August 1st expiration date would be desirable given the potential annualized return on investments for either outcome.  Importantly to the Covered Calls Advisor, there is no quarterly earnings report (which increases the volatility of the stock price on the day earnings are reported) prior to the options expiration date since the next earnings report on August 19th is after the August 1st options expiration date.

As shown on the table at the bottom of this post, all nine criteria of my Dividend Capture Strategy are met with this position.  Even if Lowe's stock market declines somewhat during the next 18 days until the options expiration date, if the stock closes above the $215.00 strike price, then a very satisfactory annualized-return-on-investment of +32.3% will be achieved, and the probability that this will occur was 70.5% when this position was established.  

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

•  +1.0% absolute return (equivalent to +41.8% annualized return-on-investment for the next 9 days) if the stock is assigned early (on the business day prior to the July 23rd ex-dividend date). 
  

• +1.6% absolute return (equivalent to +32.3% annualized return-on-investment over the next 21 days) if the stock is assigned on the August 1st, 2025 options expiration date.

Lowe's Companies Inc. (LOW) -- New Covered Calls Position
The buy/write transaction was:
7/14/2025 Bought 100 Lowe's Companies Inc. shares @ $220.78
7/14/2025 Sold 1 Lowe's 8/1/2025 $215.00 Call option @ $7.98 per share.
Note: Implied Volatility (IV) of the Call option was at 22.8 when this position was transacted which, as preferred, is above the current VIX of 17.0.   
7/23/2025 Upcoming quarterly ex-dividend of $1.20 per share.

Two possible overall performance results (including commissions) for this Lowe's Companies Inc. Covered Calls position are as follows:
Covered Calls Cost Basis: $21,280.67
= ($220.78 - $7.98) * 100 shares + $.67 commission

Net Profit Components:
(a) Options Income: +$797.33
= ($7.98 * 100 shares) - $.67 commission
(b) Dividend Income (If option exercised early on July 22nd, 2025, the business day prior to the July 23rd ex-div date): +$0.00; or
(b) Dividend Income (If Lowe's stock assigned at the August 1st, 2025 options expiration): +$120.00
= ($1.20 dividend per share x 100 shares)

(c) Capital Appreciation (If Lowe's Call option assigned early on July 22nd, 2025): -$578.00

+($215.00 strike price - $220.78 stock purchase price) * 100 shares; or
(c) Capital Appreciation (If shares assigned at $215.00 strike price at options expiration): -$578.00
+($215.00 - $220.78) * 100 shares

1. Total Net Profit [If option exercised early (business day prior to the July 23rd ex-dividend date)]: +$219.33

= (+$797.33 option income + $0.00 dividend income - $578.00 capital appreciation); or

2. Total Net Profit (If Lowe's shares assigned at the $215.00 strike price at the August 1st, 2025 options expiration date): +$339.33

= (+$797.33 + $120.00 dividend income - $578.00)

1. Potential Absolute Return-on-Investment (If option exercised on business day prior to ex-dividend date): +1.0%

= +$219.33/$21,280.67

Potential Annualized Return-on-Investment (If option exercised early): +41.8%

= (+$219.33/$21,280.67) * (365/9 days); or

2. Potential Absolute Return-on-Investment (If Lowe's shares assigned on August 1st options expiration date): +1.6%

= +$339.33/$21,280.67

Potential Annualized Return-on-Investment (If Lowe's shares assigned at the $215.00 strike price on the August 1st, 2025 options expiration date): +32.3%

= (+$339.33/$21,280.67) * (365/18 days)

Either outcome provides an attractive return-on-investment result for this Lowe's Companies Inc. investment.  These returns will be achieved as long as the stock is above the $215.00 strike price at assignment.  However, if the stock declines below the strike price, the breakeven price of $211.60 ($220.78 - $7.98 - $1.20) provides 4.2% 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 (see below) must be 'YES' prior to establishing a new Covered Calls position using the Covered Calls Advisor's Dividend Capture strategy.  As shown below, all nine criteria are achieved for this Lowe's Companies Inc. Covered Call position.

July 11th, 2025 Option Expiration Results

The Covered Calls Advisor Portfolio had one Covered Call position in NVIDIA Corporation (NVDA) at the July 11th, 2025 weekly options expiration date and at the $152.50 strike price.  The position closed in-the-money yesterday at $164.92 per share, so the Call options expired and the 400 NVIDIA shares were sold at their $152.50 strike price.  A summary of the results is:

NVDA -- +1.4% absolute return-on-investment (equivalent to +50.8% annualized return-on-investment) for the 10 days of this Covered Calls investment.  The original blog post when this position was established is here. 

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net

Covered Calls Position Established in Dell Technologies Inc.

Today I established a second Covered Calls position in Dell Technologies Inc. (ticker DELL) when two hundred shares were purchased at $126.22 and two August 1st, 2025 Call options were sold at $7.88 per share at the $120.00 strike price.  My prior Dell CC position is here.

The corresponding potential time value (aka extrinsic value) profit potential for today's new position is $1.66 per share = [$7.88 Call options premium - ($126.22 stock purchase price - $120.00 strike price)].  An in-the-money Covered Calls position was established with the probability that the Calls will be in-the-money and thus the stock would be assigned at $120.00 per share on the options expiration date was 73.5% when this position was established.  

Dell's next ex-dividend of $.525 per share (1.7% annual dividend yield) goes ex-dividend on July 22nd which is before the options expiration date, so my Dividend Capture Strategy applies for this position.  The next quarterly earnings report is not until August 28th which, as preferred, is after the August 1st options expiration date.

As detailed below, two potential return-on-investment results are: (1) +1.4% absolute return-on-investment (equivalent to +46.4% annualized return-on-investment for the next 11 days) if the Calls are assigned early on the day prior to the 7/22/2025 ex-dividend date; OR (2) +1.8% absolute return-on-investment (equivalent to +32.0% annualized return-on-investment for the next 21 days) if Dell's share price is in-the-money (i.e. above the $120.00 strike price) and the stock is therefore assigned on its August 1st, 2025 options expiration date. 

 

Dell Technologies Inc. (DELL) -- New Covered Calls Position

The net debit buy/write limit order was executed as follows:

7/11/2025 Bought 200 shares of Dell Technologies stock @ $126.22 per share.  
7/11/2025 Sold 2 DELL August 1st, 2025 $120.00 Call options @ $7.88 per share.  Note: the Implied Volatility of the Calls was 32.1% when this position was established.  
7/22/2025 Ex-dividend of $.525 per share.

Two possible overall performance results (including commissions) if the position is in-the-money on the options expiration date is as follows:
Dell Technologies Covered Calls Net Investment: $23,669.34
= ($126.22 - $7.88) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$1,574.66
= ($7.88 * 200 shares) - $1.34 commission
(b) Dividend Income (If Dell shares assigned on 7/21/2025, the business day prior to the 7/22/2025 ex-dividend date): = +$0.00; or
(b) Dividend Income (If Dell shares assigned at the 8/1/2025 options expiration): +$105.00
= $.525 per share x 200 shares
(c) Capital Appreciation (If Dell shares assigned early on 7/22/2025): -$1,244.00
= ($120.00 strike price - $126.22 stock purchase price) * 200 shares; or
(c) Capital Appreciation (If Dell shares assigned with stock above the $120.00 strike price at the August 1st options expiration date): -$1,244.00
= ($120.00 - $126.22) * 200 shares

1. Potential Net Profit (If Dell shares assigned on the July 22nd ex-dividend date): +$330.66
= (+$1,574.66 options income + $0.00 dividend income - $1,244.00 capital appreciation)
2. Potential Net Profit (If Dell price is above $120.00 strike price at the August 1st options expiration): +$435.66
= (+$1,574.66 options income + $105.00 dividend income - $1,244.00 capital appreciation)

1. Absolute Return-on-Investment (If Dell shares assigned early on the July 22nd, 2025 ex-dividend date): +1.4%
= +$330.66/$23,669.34
Equivalent Annualized Return-on-Investment (If assigned early): +46.4%
= (+$330.66/$23,669.34) * (365/11 days)

2. Absolute Return-on-Investment (If Dell price is above the $120.00 strike price at the August 1st, 2025 options expiration): +1.8%
= +$435.66/$23,669.34
Equivalent Annualized Return-on-Investment (If assigned on the 8/1/2025 options expiration date): +32.0%
= (+$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 in the table below for this Dell Technologies Inc. position, all nine criteria are met.

July 3rd, 2025 Option Expiration Results

The Covered Calls Advisor Portfolio had one Covered Call position in Amazon.com Inc. (AMZN) at the July 3rd, 2025 weekly options expiration date and at the $205.00 strike price.  The position closed in-the-money yesterday at $223.41 per share, so the Call option expired and the 100 Amazon shares were sold at their $205.00 strike price.  A summary of the results is:

AMZN -- +1.1% absolute return-on-investment (equivalent to +39.1% annualized return-on-investment) for the 10 days of this Covered Calls investment.  The original blog post when this position was established is here. 

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net

Covered Call Position Established in Amazon.com Inc.

This morning I established a new Covered Call position in Amazon.com Inc. (ticker AMZN) when my buy/write net debit limit order was executed at a price of $212.40.  One hundred shares were purchased at $221.43 and 1 July 18th, 2025 $215.00 Call option was sold at $9.03 per share.  So, the maximum potential time value profit if the stock is in-the-money and therefore closed out by assignment on the options expiration date is $2.60 per share [$9.03 Call option premium - ($221.43 stock purchase price - $215.00 strike price)].  The probability that the Call option will be above the $215.00 strike price on the July 18th options expiration date when this Covered Call position was established was 70.0%.

I have another existing Amazon Covered Call position that will expire today on its options expiration date.  Because of my continuing bullish sentiment regarding Amazon's growth prospects, I decided to establish this new position today with an expiration on July 18th (15 calendar days from today). 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. 

 

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

As detailed below, a potential return-on-investment result is +1.2% absolute return-on-investment (equivalent to +29.7% annualized return-on-investment for the next 15 days) if the Amazon.com Inc. share price is in-the-money (i.e. above the $215.00 strike price) and the stock is therefore assigned on its July 18th, 2025 options expiration date. 

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

The net debit buy/write limit order was executed as follows:
7/3/2025 Bought 100 shares of Amazon.com stock @ $221.43 per share.  
7/3/2025 Sold 1 AMZN July 18th, 2025 $215.00 Call option @ $9.03 per share.  Note: this was a simultaneous Buy/Write transaction and the Implied Volatility of the Call option was 27.7 when this position was established which, as preferred, is well above the current VIX of 16.5.  

Net Profit Components:
(a) Option Income: +$902.33
= ($9.03 * 100 shares) - $.67 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If Amazon.com stock is above the $215.00 strike price at the July 18th, 2025 options expiration date): -$643.00
= ($215.00 strike price - $221.43 stock purchase price) * 100 shares

Total Net Profit Potential (If AMZN is in-the-money and therefore assigned at the $215.00 strike price on its 7/18/2025 options expiration date): +$259.33
= (+$902.33 option income + $0.00 dividend income - $643.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.2%
= +$259.33/$21,240.67
Potential Equivalent Annualized-Return-on-Investment: +29.7%
= (+$259.33/$21,240.67) * (365/15 days)  

Established Covered Calls in iShares Bitcoin ETF

This morning I established a short-term Covered Calls position in iShares Bitcoin ETF (ticker IBIT).  My net buy/write limit order at $57.00 was executed by simultaneously purchasing six hundred shares at $60.45 and selling six July 18th, 2025 Call options at the $58.00 strike price at $57.00 per share, which provides a $1.00 per share = [$3.45 Call options premium received - ($60.45 stock purchase price - $58.00 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 69.0%.  

The iShares Bitcoin ETF (ticker IBIT) is the largest Bitcoin ETF and it provides direct exposure to the spot price of Bitcoin. It was launched in January 2024 as one of the first U.S.-listed spot Bitcoin ETFs approved by the SEC.  IBIT is a good way for us retail investors to gain exposure to Bitcoin since it holds actual Bitcoin in custody (not futures contracts), thus enabling us to gain exposure to Bitcoin’s price movements through a traditional brokerage account without having to buy or store Bitcoin ourselves (and at a reasonably low annual management fee of .25%).      

As detailed below, a potential return-on-investment result is +1.7% absolute return-on-investment (equivalent to +37.4% annualized return-on-investment for the next 17 days) if the iShares Bitcoin ETF share price is in-the-money (i.e. above the $58.00 strike price) and therefore assigned on its July 18th, 2025 options expiration date.  

iShares Bitcoin ETF (IBIT) -- New Covered Calls Position

Today's buy/write net limit order transaction was as follows:
7/1/2025 Bought 600 iShares Bitcoin ETF shares at $60.45.

7/1/2025 Sold 6 IBIT 7/18/2025 $58.00 Call options @ $3.45 per share.  The Implied Volatility of these Calls was 37.1% when this position was established.  

A possible overall performance result (including commissions) for this iShares Bitcoin ETF Covered Calls position is as follows:
Covered Calls Net Investment: $34,204.02
= ($60.45 - $3.45) * 600 shares + $4.02 commission

Net Profit:
(a) Options Income: +$2,065.98
= ($3.45 * 600 shares) - $4.02 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 600 iShares Bitcoin ETF shares assigned at the $58.00 strike price at expiration): -$1,470.00
+($58.00 strike price - $60.45 stock purchase price) * 600 shares

Total Net Profit Potential (If 600 IBIT shares in-the-money and therefore assigned at the $58.00 strike price at the options expiration date): +$595.98
= (+$2,065.98 options income + $0.00 dividend income - $1,470.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.7%
= +$595.98/$34,204.02
Potential Annualized Return-on-Investment: +37.4%
= (+$595.98/$34,204.02) * (365/17 days)

Established Covered Calls in Nvidia Corporation

This morning I established a short-term Covered Calls position in Nvidia Corporation (ticker NVDA).  My net buy/write limit order at $150.40 was executed by simultaneously purchasing four hundred shares at $156.37 and selling four July 11th, 2025 weekly Call options at the $152.50 strike price at $59.7 per share, which provides a $2.10 per share = [$5.97 Call options premium received - ($156.37 stock purchase price - $152.50 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 66.3%.  As preferred, the next earnings report on August 27th, 2025 is after the July 11th options expiration date. 

As detailed below, a potential return-on-investment result is +1.4% absolute return-on-investment (equivalent to +50.8% annualized return-on-investment for the next 10 days) if the Nvidia share price is in-the-money (i.e. above the $152.50 strike price) and therefore assigned on its July 11th, 2025 options expiration date.  

Nvidia Corporation (NVDA) -- New Covered Calls Position

Today's buy/write net limit order transaction was as follows:
7/1/2025 Bought 400 Nvidia Corporation shares at $156.37.

7/1/2025 Sold 4 NVDA 7/11/2025 $152.50 Call options @ $5.97 per share.  The Implied Volatility of these Calls was 34.9% 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: $60,162.68
= ($156.37 - $5.97) * 400 shares + $2.68 commission

Net Profit:
(a) Options Income: +$2,385.32
= ($5.97 * 400 shares) - $2.68 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 400 Nvidia shares assigned at the $152.50 strike price at expiration): -$1,548.00
+($152.50 strike price - $156.37 stock purchase price) * 400 shares

Total Net Profit Potential (If 400 Nvidia shares in-the-money and therefore assigned at the $152.50 strike price at the options expiration date): +$837.32
= (+$2,385.32 options income + $0.00 dividend income - $1,548.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.4%
= +$837.32/$60,162.68
Potential Annualized Return-on-Investment: +50.8%
= (+$837.32/$60,162.68) * (365/10 days)