A short-term in-the-money Covered Calls position was established today in KraneShares CSI China Internet ETF (ticker KWEB). Five hundred shares were purchased at $35.21 and five February 13th, 2026 Call options were sold at the $34.50 strike price at $1.14 per share--a buy/write net debit limit transaction of $34.07 per share which provides a maximum $.43 per share [$1.14 Call options premium - ($35.21 stock purchase price - $34.50 strike price)] time value profit potential. The probability of the Calls being in-the-money on the options expiration date was 63.4% when this transaction occurred.
As detailed below, a potential result is +1.2% absolute return-on-investment (equivalent to +41.2% annualized
return-on-investment for the next 11 days) if KWEB's share price is in-the-money (i.e. above the $34.50 strike price) and therefore assigned on its February 13th, 2026 options expiration date.
KraneShares CSI China Internet ETF (KWEB) -- New Covered Calls Position
The net debit limit Buy/Write transaction was as follows:
2/2/2026 Bought 500 shares of KraneShares CSI China Internet ETF @ $35.21 per share.
2/2/2026 Sold 5 KWEB Feb. 13th, 2026 $34.50 Call options @ $1.14 per share. The Implied Volatility of the Calls was 30.5 when this position was established.
A possible overall performance result (including commissions) for this CSI China Internet ETF Covered Calls position is as follows:
KWEB Covered Calls Net Investment: $17,038.35
= ($35.21 - $1.14) * 500 shares + $3.35 commission
Net Profit:
(a) Options Income: +$566.65
= ($1.14 * 500 shares) - $3.35 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 500 CSI China Internet ETF shares assigned at $34.50 strike price at expiration): -$355.00
+($34.50 strike price - $35.21 shares purchase price) * 500 shares
Total Net Profit Potential (If 500 CSI China Internet ETF shares are assigned because they are in-the-money at the options expiration date): +$211.65
= (+$566.65 options income + $0.00 dividend income - $355.00 capital appreciation)
Potential Absolute Return-on-Investment: +1.2%
= +$211.65/$17,038.35
Potential Annualized Return-on-Investment: +41.2%
= (+$211.65/$17,038.35) * (365/11 days)
