Covered Calls Position Established in Dell Technologies Inc.

Early in this morning's trading session, I established a Covered Calls position in Dell Technologies Inc. (ticker DELL) when two hundred shares were purchased at $136.00 and two December 26th, 2025 Call options were sold at $8.40 per share at the $130.00 strike price. So, the corresponding potential time value (aka extrinsic value) profit potential is $2.40 per share = [$8.40 Call options premium - ($136.00 stock purchase price - $130.00 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 $130.00 per share on the options expiration date was 67.6% when this position was established.  As I prefer, there is no intervening quarterly earnings report prior to the options expiration date.  This Covered Calls position was preferable to its comparable Cash-Secured Puts position since the potential time value profit for the Calls was higher than that of the comparable Puts when this position was established.

Dell Technologies is a manufacturer of IT hardware, software, and service solutions spanning both traditional infrastructure and emerging, multi-cloud technologies.  Its two business segments are: (1) Infrastructure Solutions Group (ISG is its greater growth segment), which provides enterprise on-premises data center infrastructure; and (2) Client Solutions Group (CSG), which provides premium and commercial PCs and peripherals.  In ISG, Dell has become a leading vendor of Nvidia AI servers to corporations, and they have a large global distribution and services footprint.  Dell has also won CoreWeave and Elon Musk's xAI as customers in support of their AI buildouts.  In CSG, Dell is now poised to benefit from an improving product cycle for PCs and servers since companies are now refreshing their computers to current versions of Windows after Microsoft ended support of Windows 10 in October this year. 

Dell is now priced at an attractive valuation with a P/E ratio of only 12.1 on a forward-twelve-months estimates basis, and with mid-teens or higher earnings growth (a PEG ratio below 1.0), there is a good likelihood of stock price appreciation in 2026 from P/E multiple expansion.  Twenty Wall Street analysts that cover Dell have an average "Buy" rating and a $159.78 target price.  Also, Dell passed all criteria in my "VQM" (Value+Quality+Momentum) stock screener.  The output criteria from this screener are shown on this chart:  

As detailed below, a potential return-on-investment result is +1.9% absolute return-on-investment (equivalent to +45.6% annualized return-on-investment for the next 15 days) if Dell's share price is in-the-money (i.e. above the $130.00 strike price) and the stock is therefore assigned on its December 26th, 2025 options expiration date. 

 

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

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

12/11/2025 Bought 200 shares of Dell Technologies stock @ $136.00 per share.  
12/11/2025 Sold 2 DELL December 26th, 2025 $130.00 Call options @ $8.40 per share.  Note: the Implied Volatility of the Calls was 44.1% when this position was established.  

A possible overall performance result (including commissions) if the position is in-the-money on the 12/26/2025 options expiration date is as follows:
Dell Technologies Covered Calls Net Investment: $25,521.34
= ($136.00 - $8.40) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$1,678.66
= ($8.40 * 200 shares) - $1.34 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If Dell Technologies stock is above the $130.00 strike price at the December 26th options expiration date): -$1,200.00
= ($130.00 strike price - $136.00 stock purchase price) * 200 shares

Potential Total Net Profit (If in-the-money and therefore assigned at expiration): +$478.66
= (+$1,678.66 options income + $0.00 dividend income - $1,200.00 capital appreciation)

Potential Absolute Return-on-Investment (If stock price is in-the-money and therefore assigned on the 12/26/2025 options expiration date): +1.9% = +$478.66/$25,521.34

Potential Equivalent Annualized-Return-on-Investment: +45.6%
= (+$478.66/$25,521.34) * (365/15 days)