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.