As detailed below, a potential outcome for this IBM Covered Calls investment if the stock is in-the-money and therefore assigned on the options expiration date is +3.1% absolute return-on-investment over 25 days (equivalent to +45.0% annualized-return-on-investment) if the stock closes above the $222.50 strike price on the 5/29/2026 options expiration date.
IBM Corporation (IBM) -- Continuation of Covered Calls Position
The buy/write transaction was:
5/4/2026 Bought 200 IBM shares @ $231.90
5/4/2026 Sold 2 IBM 5/15/2026 $225.00 Call options @ $9.00. The Implied Volatility of the Calls was 32.3 when this transaction occurred.
5/8/2026 Quarterly ex-dividend of $1.69 per share
5/15/2026 Two IBM Calls expired out-of-the-money, so the 200 shares remained in the Covered Calls Advisor Portfolio.
5/18/2026 Continued Covered Calls position by selling-to-open two 5/29/2026 $222.50 Calls at $5.60 per share when the price of IBM stock was at $222.78.
A possible overall performance result (including commissions) for this IBM Covered Calls position if the stock price is in-the-money on the 5/29/2026 options expiration date is as follows:
Covered Calls Net Investment: $44,581.34
= ($231.90 - $9.00) * 200 shares + $1.34 commission
Net Profit Components:
(a) Options Income: +$2,917.32
= ($9.00 +5.60) * 200 shares - $2.68 commission
(b) Dividend Income: +$338.00
= ($1.69 dividend per share x 200 shares)
(c) Capital Appreciation (If shares assigned at $222.50 strike price at the 5/29/2026 options expiration date): -$1,880.00 = +($222.50 strike price - $231.90 stock purchase price) * 200 shares
