Established Covered Calls Position in Citigroup Inc.

This afternoon, a Covered Calls position was established in Citigroup Inc. (ticker symbol C) using my Dividend Capture Strategy (see here) when 200 shares were purchased at $113.45 and 2 February 6th, 2026 Call options were sold at $3.78 per share at the $111.00 strike price.  The net debit limit order at $109.67 was executed, so the time value was $1.33 per share [$3.78 Call options premium - ($113.45 stock purchase price - $111.00 strike price)]. There is also an upcoming quarterly ex-dividend of $.60 per share on February 2nd (a current annual dividend yield of 2.1%), so two potential return-on-investment results for this position, as detailed below, include the possibility of early assignment since the ex-dividend is prior to the February 6th, 2026 options expiration date.  

Citigroup's earnings report 9 days ago was very positive. Also, since their next earnings report is not until April 14, 2026, there is no earnings report prior to the options expiration date.  From a technical indicators viewpoint, Market Edge's current rating of Morgan Stanley is a "Strong Buy"; and my Stock Rover platform has identified zero red flags for Citigroup.  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 2/6/2026 options expiration date was 66.1%.  

Most companies in the Financial Sector provide only modest growth prospects, but they often provide good annual dividend yields (such as the 2.1% annual dividend yield for this Citigroup position).  Consequently, the Covered Calls Advisor targets opportunities to use the Dividend Capture Strategy in all Financial Sector Covered Calls positions.  This new February 6th, 2026 Citigroup 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 often the annualized return-on-investment for early assignment is close to or somewhat greater than what would be achieved if the stock was instead assigned on its options expiration date.  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.   

The average target price of the analysts covering Citigroup Inc. stock is $131.47 (+15.9% above today's stock purchase price).  Citigroup also passed all criteria in my customized "Financial Sector" stock screener as detailed in the chart below:

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

•  +1.2% absolute return (equivalent to +44.0% annualized return-on-investment for the next 10 days) if the stock is assigned early (on the last business day prior to the February 2nd, 2026 ex-dividend date); OR 

• +1.8% absolute return (equivalent to +45.7% annualized return-on-investment over the next 14 days) if the stock is assigned on the February 6th, 2026 options expiration date.

Citigroup Inc. (C) -- New Covered Calls Position
The simultaneous buy/write transaction was:
1/23/2026 Bought 200 Citigroup Inc. shares @ $113.45.
1/23/2026 Sold 2 Citigroup 2/6/2026 $111.00 Call options @ $3.78 per share.
Note: The Implied Volatility of the Call options was 26.2 when this position was transacted.
2/2/2026 Upcoming quarterly ex-dividend of $.60 per share.

Two possible overall performance results (including commissions) for this Citigroup Inc. Covered Calls position are as follows:
Covered Calls Cost Basis: $21,935.34
= ($113.45 - $3.78) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$754.66
= ($3.78 * 200 shares) - $1.34 commission
(b) Dividend Income (If options exercised early on January 30th, 2026, the last business day prior to the April 2nd, 2026 ex-div date): +$0.00; or
(b) Dividend Income (If Citigroup stock assigned on the April 6th, 2026 options expiration date): +$120.00
= ($.60 dividend per share x 200 shares)

(c) Capital Appreciation (If Citi Call options assigned early on January 30th): -$490.00
+($111.00 strike price - $113.45 stock purchase price) * 200 shares; or
(c) Capital Appreciation (If shares assigned at $111.00 strike price at options expiration): -$490.00
+($111.00 - $113.45) * 200 shares

1. Total Net Profit (If options exercised early): +$264.66

= (+$754.66 options income +$0.00 dividend income - $490.00 capital appreciation); or

2. Total Net Profit (If Citi shares assigned at $111.00 at the April 6th, 2026 options expiration): +$384.66

= (+$754.66 options income + $120.00 dividend income - $490.00 capital appreciation)

1. Absolute Return-on-Investment [If option exercised on business day prior to the Feb. 2nd, 2026 ex-dividend date]: +1.2%

= +$264.66/$21,935.34

Annualized Return-on-Investment (If option exercised early): +44.0%

= (+$264.66/$21,935.34) * (365/10 days); or

2. Absolute Return-on-Investment (If Citi shares assigned on the April 6th, 2026 options expiration date): +1.8%

= +$384.66/$21,935.34

Annualized Return-on-Investment (If Citi shares assigned at $111.00 at the Apr. 6th, 2026 expiration): +45.7%

= (+$384.66/$21,935.34) * (365/14 days)