Covered Call Position Established in Arista Networks Inc.

Today a Covered Call position in Arista Networks Inc. (ANET) was established when one hundred shares were purchased at $123.85 and one January 23rd, 2026 Call option was sold at $8.15 per share at the $118.00 strike price.  The buy/write net debit limit order at $115.70 was executed, so the time value was $2.30 per share [$8.15 Call option premium - ($123.85 stock purchase price - $118.00 strike price)].  As I prefer, Arista's next quarterly earnings report on February 24th, 2026 is after the January 23rd, 2026 options expiration date.  An in-the-money Covered Call position was established with a 68.4% probability of assignment on the options expiration date. 

Arista Networks is the technology leader in high-speed switching for enterprise networks and has established itself in the most cutting-edge apps for the hyperscalers, which makes it a significant beneficiary of AI spending.  Its Extensible Operating System (EOS) provides customers a modular software solution scalable for networks of any size, which will also be attractive for smaller enterprises building out private clouds or on-premises data centers.

Arista passed all criteria in my Super Growers stock screener which is shown in the table below.  Furthermore, the average target price of the 19 analysts currently covering the company is +35% above today's stock purchase price and it is Buy rated by all four third-party stock research services provided by my broker (Schwab) -- CFRA, Morningstar, Argus, and LSEG Stocks Plus Reports.  It is also Buy rated by Schwab Equity Ratings.  Finally, I like the fact that (unlike the majority of S&P 500 companies) Arista's quarterly Non-GAAP EPS consistently mirror their GAAP EPS.

As detailed below, a potential return-on-investment result for this Arista Networks Covered Call is +2.0% absolute return-on-investment (equivalent to +48.2% annualized return-on-investment over the next 15 days) if the stock is in-the-money and therefore assigned on its January 23rd, 2026 options expiration date.

Arista Networks Inc. (ANET) -- New Covered Call Position
The simultaneous buy/write transaction today was as follows:
1/8/2026 Bought 100 Arista Networks shares @ $123.85
1/8/2026 Sold 1 ANET 1/23/2026 $118.00 Call option @ $8.15 per share
Note: the Implied Volatility of this Call option was 46.3 when this transaction was executed.  As I prefer, this value exceeds that of the S&P 500 Volatility Index (VIX) which is currently 15.3.

A possible overall performance result (including commissions) for this Arista Networks Covered Call position if assigned on the options expiration date is as follows:
Covered Call Cost Basis: $11,570.67
= ($123.85 - $8.15) * 100 shares + $.67 commission

Net Profit Components:
(a) Option Income: +$814.33
= ($8.15 * 100 shares) - $.67 commissions
(b) Dividend Income $0.00
(c) Capital Appreciation (If Arista shares assigned at $118.00 strike price at options expiration): -$585.00
+($118.00 strike price - $123.85 stock purchase price) * 100 shares

Total Net Profit (If Arista Networks shares assigned at the $118.00 strike price at the 1/23/2026 expiration): +$229.33

= (+$814.33 Call option income + $0.00 dividend income - $585.00 capital appreciation)

Absolute Return-on-Investment (If Arista's shares assigned at the $118.00 strike price on Jan. 23rd, 2026 options expiration date): +2.0%

= +$229.33/$11,570.67

Annualized Return-on-Investment (If Arista's stock is assigned at the $118.00 strike price on the 1/23/2026 options expiration date): +48.2%

= (+$229.33/$11,570.67) * (365/15 days)