This position uses the Covered Calls Advisor's Dividend Capture Strategy since Amgen has an upcoming quarterly ex-dividend of $2.52 per share on May 15th which is prior to the May 22nd options expiration date. This is equivalent to an annual dividend yield of 3.1% and an equivalent annualized dividend yield of a very high 25.4% = [($2.52/$328.90) x (365/11 days to expiration)]. This dividend is included in the return-on-investment calculations detailed below. Either an early assignment on May 14th (the last trading day prior to the ex-dividend date) or on the May 22nd options expiration date would be desirable given the potential annualized return on investment for either outcome. Importantly to the Covered Calls Advisor, there is no quarterly earnings report prior to the options expiration date since the next earnings report on August 4th, 2026 is more than two months after the May 22nd options expiration date.
Amgen Inc. (AMGN) -- New Covered Call Position
Amgen is one of the world’s largest biotechnology companies, generating revenue by discovering, developing, manufacturing, and marketing biologic medicines for serious diseases in areas such as oncology, cardiovascular disease, inflammation, and rare disorders. Its business model combines a portfolio of established blockbuster drugs with a deep pipeline of new therapies and biosimilars, creating recurring cash flow that funds ongoing research, acquisitions, and shareholder returns while supporting long-term growth. Amgen’s key competitive advantages include decades of biologics manufacturing expertise, large-scale global production infrastructure, a strong intellectual property portfolio, and extensive clinical, regulatory, and commercial capabilities that create high barriers to entry and help efficiently scale therapies worldwide.
As detailed below, two potential return-on-investment results are:
- +0.7% absolute return (equivalent to +59.6% annualized return-on-investment for the next 4 days) if the stock is assigned early (on the last business day prior to this Friday's May 15th ex-dividend date); or
- +1.4% absolute return (equivalent to +47.6% annualized return-on-investment over the next 11 days) if the stock is assigned on the May 22nd, 2026 options expiration date.
As shown on the table at the bottom of this post, eight of the nine criteria of my Dividend Capture Strategy are met with this position. The probability that this Call option will expire in-the-money on the options expiration date was 70.8% when this position was established.
The buy/write transaction was:
5/11/2026 Bought 100 Amgen Inc. shares @ $328.905/11/2026 Sold 1 AMGN 5/22/2026 $322.50 Call option @ $8.50 per share.
Note: Implied Volatility (IV) of the Call option was 20.2 when this position was transacted which, as preferred, is above the current VIX of 18.4.
5/15/2026 Upcoming quarterly ex-dividend of $2.52 per share.
Two possible overall performance results (including commissions) for this Amgen Covered Call position are as follows:
Covered Call Net Investment: $32,040.67
= ($328.90 - $8.50) * 100 shares + $.67 commission
Net Profit Components:
(a) Option Income: +$849.33
= ($8.50 * 100 shares) - $.67 commission
(b) Dividend Income (If Amgen Call option exercised early on May 14th, 2026, the last business day prior to the May 15th ex-div date): +$0.00; or
(b) Dividend Income (If Amgen stock assigned at the May 22nd, 2026 options expiration): +$252.00
= ($2.52 dividend per share x 100 shares)
(c) Capital Appreciation (If Amgen Call option assigned early on May 15th, 2026): -$640.00
= ($322.50 strike price - $328.90 stock purchase price) * 100 shares; or
(c) Capital Appreciation (If shares assigned at $322.50 strike price at the 5/22/2026 options expiration): -$640.00 = ($322.50 - $328.90) * 100 shares
1. Total Net Profit [If option exercised early (business day prior to the May 15th ex-dividend date)]: +$209.33
= (+$849.33 option income + $0.00 dividend income - $640.00 capital appreciation); or
2. Total Net Profit (If Amgen's shares assigned at $322.50 at the May 22nd, 2026 expiration): +$459.33
= (+$849.33 option income + $252.00 dividend income - $640.00 capital appreciation)
1. Potential Absolute Return-on-Investment [If option exercised on business day prior to the 5/15/2026 ex-dividend date]: +0.7%
= +$209.33/$32,040.67
Potential Annualized Return (If option exercised early): +59.6%
= (+$209.33/$32,040.67) * (365/4 days); or
2. Potential Absolute Return-on-Investment (If Amgen's shares assigned on the May 22nd options expiration date): +1.4%
= +$459.33/$32,040.67
Potential Annualized Return (If Amgen's shares assigned at the $322.50 strike price on the 5/22/2026 options expiration date): +47.6%
= (+$459.33/$32,040.67) * (365/11 days)
Either outcome would provide a very attractive return-on-investment result for this Amgen investment. These returns will be achieved as long as the stock is above the $322.50 strike price at assignment. However, if the stock declines below the strike price, the breakeven price of $317.88 ($328.90 - $8.50 - $2.52) provides 3.4% downside protection below today's stock purchase price.
At least eight of the nine metrics used in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet (see below) must be 'YES' prior to establishing a new Covered Call position using the Covered Calls Advisor's Dividend Capture strategy. As shown below, eight criteria are achieved for this Amgen Inc. Covered Call position.
