On the January 16th, 2026 options expiration date, the Covered Call positions in Microsoft Corporation (ticker MSFT) and ServiceNow Inc. (ticker NOW) closed out-of-the-money, so their Call options expired and their shares remained in the Covered Calls Advisor Portfolio. Today I decided to close out both positions at a loss by selling the 100 shares of Microsoft at $470.13 and the 100 shares of ServiceNow at $135.36. Both companies are reporting quarterly earnings this Wednesday after market close and since I prefer not holding stocks during their earnings report, because of the accompanying stock price volatility, I decided to sell out of these positions. The transactions history for these positions and their associated return-on-investment results are detailed below.
1. Microsoft Corporation (MSFT) -- Closed Out Covered Call PositionThe original net debit buy/write limit order was executed as follows:
10/30/2025 Bought 100 shares of Microsoft stock @ $522.64 per share.
10/30/2025 Sold 1 MSFT November 7th, 2025 $512.50 Call option @ $14.08 per share. The Implied Volatility of the Call was 25.3 when this transaction was executed.
11/7/2025 One hundred Microsoft shares closed below the $512.50 strike price at $496.77, so the one Call option expired and the 100 Microsoft shares remained in the Covered Calls Advisor Portfolio.
11/10/2025 Continued this Microsoft Corporation Covered Call position by selling 1 November 14th, 2025 $505.00 Call option at $4.00 per share when the stock was trading at $502.45 per share.
11/14/2025 One Microsoft 11/14/2025 $505.00 Call option expired out-of-the-money, so the 100 Microsoft shares remain in the Covered Calls Advisor Portfolio.
11/20/2025 Ex-dividend of $.91 per share.
11/28/2025 Continued this Microsoft Covered Call position by rolling down-and-out by selling one 12/12/2025 $492.50 Call option at $8.20 per share.
12/12/2025 One hundred Microsoft shares closed below the $492.50 strike price, so the one Call option expired and the 100 Microsoft shares remained in the Covered Calls Advisor Portfolio.
12/18/2025 Continued this Microsoft Corporation Covered Call position by selling 1 January 2nd, 2026 $487.50 Call option at $6.30 per share when the stock was trading at $484.12 per share.
1/2/2026 One hundred Microsoft shares closed below the $487.50 strike price, so the one Call option expired and the 100 Microsoft shares remained in the Covered Calls Advisor Portfolio.
1/7/2026 Continued this Microsoft Corporation Covered Call position by selling 1 January 16th, 2026 $485.00 Call option at $5.40 per share when the stock was trading at $482.40 per share.
1/16/2026 This Microsoft Call option expired out-of-the-money at $459.86 per share and the 100 shares remain in the Covered Calls Advisor Portfolio.
1/26/2026 Closed out this Microsoft Covered Call position by selling the 100 shares at $470.13.
The overall performance result (including commissions) for this position is as follows:
Microsoft Covered Call Net Investment: $50,856.67
= ($522.64 - $14.08) * 100 shares + $.67 commission
Net Profit Components:
(a) Call Option Income: +$3,794.65
= ($14.08 + $4.00 + $8.20 + $6.30 + $5.40) * 100 shares - $3.35 commissions
(b) Dividend Income: +$91.00 = $.91 ex-dividend x 100 shares
(c) Capital Appreciation (Microsoft stock sold at $470.13 per share): -$5,264.00
= ($470.13 stock selling price - $522.64 stock purchase price) * 100 shares
Total Net Loss: -$1,378.35
= (+$3,794.65 Call option income + $91.00 dividend income - $5,264.00 capital appreciation)
Absolute Return-on-Investment: -2.7%
= -$1,378.35/$50,856.67
Equivalent Annualized-Return-on-Investment: -11.2%
= (-$1,378.35/$50,856.67) * (365/88 days)
2. ServiceNow Inc. (NOW) -- Closed Out Covered Call Position
The original simultaneous buy/write transaction was as follows:
1/6/2026 Bought 100 ServiceNow Inc. shares @ $148.32
1/6/2026 Sold 1 ServiceNow 1/16/2026 $145.00 Call option @ $5.20 per share
Note: the Implied Volatility of this Call option was 31.4 when this transaction was executed. As I prefer, this value exceeds that of the S&P 500 Volatility Index (VIX) which is currently at 15.0.
1/16/2026 This ServiceNow Call option expired out-of-the-money at $127.31 per share and the 100 shares remain in the Covered Calls Advisor Portfolio.
1/26/2026 Closed out this ServiceNow Covered Call position by selling the 100 shares at $135.36.
The overall performance result (including commissions) for this position is as follows:
Covered Call Cost Basis: $14,312.67
= ($148.32 - $5.20) * 100 shares + $.67 commission
Net Profit Components:
(a) Option Income: +$519.33
= ($5.20 * 100 shares) - $.67 commissions
(b) Dividend Income $0.00
(c) Capital Appreciation (ServiceNow stock sold at $135.36 strike price at options expiration): -$1,296.00
+($135.36 strike price - $148.32 stock purchase price) * 100 shares
Total Net Loss (ServiceNow shares sold at $135.36 per share): -$776.67
= (+$519.33 Call option income + $0.00 dividend income - $1,296.00 capital appreciation)
Absolute Return-on-Investment: -5.4%
= -$776.67/$14,312.67
Annualized Return-on-Investment: -99.0%
= (-$776.67/$14,312.67) * (365/20 days)
