Established Covered Calls Position in Dell Technologies Inc.

A Covered Calls position was established in Dell Technologies Inc. (DELL) when the Covered Calls Advisor's buy/write limit order at a net debit limit price of $126.70 was executed. Two hundred shares were purchased at $134.00 and two August 2nd, 2024 in-the-money Call options were sold at $7.30 at the $130.00 strike price.  In addition, there is an upcoming ex-dividend of $.445 per share (1.3% annual dividend yield) on July 23rd which is included in the potential annualized-return-on-investment results detailed below.  The Implied Volatility of the Calls was 40.3 and the probability of the Calls expiring in-the-money on the August 2nd options expiration date was 62.1% when this position was established.  Also as desired, the next quarterly earnings report on August 29th is after the August 2nd options expiration date.  The current average target price by the 16 analysts covering Dell is $159.93 which is +19.4% above today's stock purchase price.

The potential return-on-investment result for this Dell Covered Calls position is: +3.0% absolute return-on-investment (equivalent to +63.3% annualized return-on-investment for the next 17 days) if the stock price is in-the-money (i.e. above the $130.00 strike price) on the August 2nd, 2024 options expiration date.

Dell Technologies Inc. (DELL) -- New Covered Calls Position

The buy/write transaction was:
7/16/2024 Bought 200 Dell Technologies Inc. shares @ $134.00
7/16/2024 Sold 2 DELL 8/2/2024 $130.00 Call options @ $7.30 per share.
7/23/2024 Ex-dividend of $.445 per share.

A possible overall performance result (including commissions) for this DELL Covered Calls position is as follows:
Covered Calls Net Investment: $25,341.34
= ($134.00 - $7.30) * 200 shares + $1.34 commission

Net Profit:
(a) Options Income: +$1,458.66
= ($7.30 * 200 shares) - $1.34 commission
(b) Dividend Income:  +$89.00
= ($.445 dividends per share x 200 shares)
(c) Capital Appreciation (If Dell stock price is above the $130.00 strike price on the 8/2/2024 options expiration date): -$800.00

= ($130.00 stock selling price on expiration date - $134.00 stock purchase price) x 200 shares

Total Net Profit (If stock price is above the $130.00 strike price on the 8/2 options expiration date): +$747.66

= (+$1,458.66 options income +$89.00 dividend income -$800.00 capital appreciation)

Potential Absolute Return-on-Investment (If stock price increases to above the $130.00 strike price on the 8/2 options expiration date): +3.0%

= (+$747.66/$25,341.34)

Potential Equivalent Annualized Return-on-Investment: +63.3%

= (+$747.66/$25,341.34) * (365/17 days)

Closed Covered Calls Positions in Las Vegas Sands Corporation and Schlumberger Ltd.

Last Friday, the Covered Calls positions in Las Vegas Sands Corporation (ticker LVS) and Schlumberger Ltd. (now named SLB and also with ticker SLB) closed out-of-the-money, so their Call options expired and their shares remained in the Covered Calls Advisor Portfolio.  Today I decided to close out both positions by selling the 400 shares of LVS at $42.76 and the 300 shares of SLB at $48.12. The transactions history for these positions and their associated return-on-investment results are detailed below.

1. Las Vegas Sands Corporation (LVS) -- Covered Calls Position Closed Out 

The Buy/Write transaction was as follows:
6/25/2024 Bought 400 shares of Las Vegas Sands Corporation @ $44.49 per share.  
6/25/2024 Sold 4 LVS July 12th, 2024 $43.00 Call options @ $2.05 per share.  The Implied Volatility of these Call options was 27.5 and the probability that the Calls will expire in-the-money on the options expiration date was 70.7% when this transaction was executed today.

7/12/2024 Four Call options expired out-of-the-money at $42.85 per share and the 400 LVS shares remain in the Covered Calls Advisor Portfolio.

7/15/2024 Closed out this LVS Covered Calls position by selling the 400 remaining shares at $42.76. 

The overall performance result (including commissions) for this Las Vegas Sands Corporation Covered Calls position is as follows:
Covered Calls Net Investment: $16,978.68
= ($44.49 - $2.05) * 400 shares + $2.68 commission

Net Profit:
(a) Options Income: +$817.32
= ($2.05 * 400 shares) - $2.68 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (400 Las Vegas Sands Corporation shares sold at $42.76 per share): -$692.00
+($42.76 - $44.49) * 400 shares

Total Net Profit: +$125.32
= (+$817.32 options income +$0.00 dividend income -$692.00 capital appreciation)

Absolute Return-on-Investment: +0.7%
= +$125.32/$16,978.68
Annualized Return-on-Investment: +13.5%
= (+$125.32/$16,978.68) * (365/20 days)

2. Schlumberger Ltd. (SLB) -- Covered Calls Position Closed Out
The buy/write transaction was:

3/26/2024 Bought 300 shares of SLB stock @ $54.08 per share.  
3/26/2024 Sold 3 SLB April 19th, 2024 $52.50 Call options @ $2.48 per share.  Note: the Implied Volatility of the Calls was 26.3 when this position was established.  
4/19/2024 300 SLB shares closed out-of-the-money so 3 Calls expired and 300 SLB shares remain in the Covered Calls Advisor Portfolio.
4/23/2024 Continued Covered Calls position by selling 3 SLB 5/3/2024 Call options at the $50.00 strike price for $.76 per share when the stock price was $49.65.

5/3/2024 Three SLB Calls closed out-of-the-money at $47.77 on their options expiration date, so the Call expired and 300 SLB shares remain in the Covered Calls Advisor Portfolio.

5/6/2024 This SLB Covered Calls position was continued by selling 3 May 17th, 2024 $50.00 Calls at $.27 per share when the stock was trading at $48.25. 

5/17/2024 Rolled out the 3 SLB 5/17/2024 $50.00 Calls to 3 6/21/2024 $50.00 Calls at a net credit of $.67 per share.
6/5/2024 Upcoming ex-dividend of $.275 per share. 

6/19/2024 Three SLB Calls expired out-of-the-money and the 300 SLB shares remain in the Covered Calls Advisor Portfolio.

6/24/2024 Continued this Covered Calls position by selling-to-open 3 SLB 7/12/2024 $48.00 Call options at $.48 when the stock price was $46.76 per share against the 300 SLB shares owned.

7/12/2024 Three Call options expired out-of-the-money at $46.38 per share and the 300 SLB shares remain in the Covered Calls Advisor Portfolio.

7/15/2024 Closed out this SLB Covered Calls position by selling the 300 remaining shares at $48.12. 

The overall performance result (including commissions) for this position is as follows:
Covered Calls Net Investment: $15,482.01
= ($54.08 - $2.48) * 300 shares + $2.01 commission

Net Profit Components:
(a) Options Income: +$1,393.95
= ($2.48 + $.76 + $.27 -$.01 + $.70 + $.48) * 300 shares - $10.05 commissions
(b) Dividend Income: +$82.50
= $.275 per share x 300 shares
(c) Capital Appreciation (300 SLB shares sold at $48.12 per share): -$1,788.00
= ($48.12 strike price - $54.08 stock purchase price) * 300 shares

Total Net Profit: -$311.55
= (+$1,393.95 options income + $82.50 dividend income - $1,788.00 capital appreciation)

Absolute Return-on-Investment: -2.0% = -$311.55/$15,482.01

Equivalent Annualized-Return-on-Investment: -6.6%
= (-$311.55/$15,482.01 * (365/111 days)

Jeff Partlow (The Covered Calls Advisor)
partlow@cox.net

 

Established Covered Calls Position in The Walt Disney Company

A Covered Calls position was established in The Walt Disney Company (DIS) when the Covered Calls Advisor's buy/write limit order at a net debit limit price of $96.55 was executed. Two hundred shares were purchased at $97.58 and two July 19th, 2024 out-of-the-money Call options were sold at $1.03 at the $100.00 strike price.  In addition, there is an upcoming semi-annual ex-dividend of $.45 per share on July 8th which is included in the potential annualized-return-on-investment results detailed below.  Also as desired, the next quarterly earnings report on August 7th is after the July 19th options expiration date.  The current average target price by the 27 analysts covering Disney is $127.63 which is +30.8% above today's stock purchase price.

Two potential return-on-investment results for this Disney Covered Calls position are: (1) +1.5% absolute return-on-investment (equivalent to +32.8% annualized return-on-investment for the next 17 days) if the stock price is unchanged at $97.58 on the options expiration date; and (2) +4.0% absolute return-on-investment (equivalent to +86.6% annualized return-on-investment for the next 17 days) if the stock price increases and is in-the-money (i.e. above the $100.00 strike price) on the July 19th, 2024 options expiration date.

The Walt Disney Company (DIS) -- New Covered Calls Position

The buy/write transaction was:
7/2/2024 Bought 200 The Walt Disney Company shares @ $97.58
7/2/2024 Sold 2 DIS 7/19/2024 $100.00 Call options @ $1.03 per share.
7/8/2024 Ex-dividend of $.45 per share.

Two possible overall performance results (including commissions) for this Disney Covered Calls position are as follows:
Covered Calls Net Investment: $19,311.34
= ($97.58 - $1.03) * 200 shares + $1.34 commission

Net Profit:
(a) Options Income: +$204.66
= ($1.03 * 200 shares) - $1.34 commission
(b) Dividend Income:  +$90.00
= ($.45 dividends per share x 200 shares)
(c) Capital Appreciation (If DIS stock price unchanged at $97.58 on the 7/19/2024 options expiration date): +$0.00
+($97.58 price unchanged on options expiration date - $97.58 stock purchase price) * 200 shares; OR

(c) Capital Appreciation (If DIS stock price is above the $100.00 strike price on the 7/19/2024 options expiration date): $484.00

= ($100.00 stock selling price on expiration date - $97.58 stock purchase price) x 200 shares

1. Total Net Profit (If stock price unchanged on the 7/19/2024 options expiration date): +$294.66

= (+$204.66 options income +$90.00 dividend income +$0.00 capital appreciation); OR

2. Total Net Profit (If stock price increases to above the $100.00 strike price on the 7/19 options expiration date): +$778.66

= (+$204.66 options income +$90.00 dividend income +$484.00 capital appreciation)

1. Potential Absolute Return-on-Investment (If stock price unchanged at $97.58 on the 7/19/2024 options expiration date): +1.5%

= (+$294.66/$19,311.34)

Potential Equivalent Annualized Return-on-Investment: +32.8%

= (+$294.66/$19,311.34) * (365/17 days); OR

2. Potential Absolute Return-on-Investment (If stock price increases to above the $100.00 strike price on the 7/19 options expiration date): +4.0%

= (+$778.66/$19,311.34)

Potential Equivalent Annualized Return-on-Investment: +86.6%

= (+$778.66/$19,311.34) * (365/17 days)

Continuation of Covered Call Position in CBOE Global Markets Inc.

The Covered Calls Advisor Portfolio has a Covered Call position in CBOE Global Markets Inc. (ticker CBOE) at the $175.00 strike price which expired out-of-the-money on its Friday, 6/21/2024 options expiration date.  Today this position was continued by rolling out to the July 19th, 2024 monthly options expiration at the $172.50 strike price by selling-to-open one Call at $2.70 per share when the price of CBOE was $171.47.  

As detailed below, a potential outcome for this CBOE Global Markets Inc. investment if the stock is in-the-money and therefore assigned on the options expiration date is +2.3% absolute return-on-investment over 65 days (equivalent to +12.9% annualized-return-on-investment) if the stock closes above the $34.00 strike price on the May 10th, 2024 options expiration date.  The transactions history of this APA Covered Calls position to-date along with a potential return-on-investment result if the stock is assigned on the May 10th, 2024 options expiration date is as follows:

CBOE Global Markets Inc. (CBOE) -- New Covered Call Position
The buy/write transaction was:
5/15/2024 Bought 100 CBOE shares @ $178.50
5/15/2024 Sold 1 CBOE 6/21/2024 $175.00 Call option @ $6.70.  The Implied Volatility of the Call option was 18.4 when this transaction occurred.
5/30/2024 Quarterly ex-dividend of $.55 per share
6/21/2024 CBOE stock price was below the $175.00 strike price, so the Call expired and the 100 CBOE shares remained in the Covered Calls Advisor Portfolio.
7/1/2024 Continued this CBOE Covered Call position by selling one July 19th, 2024 $172.50 Call option @ $2.70 per share when the stock was trading today at $171.47. 

A possible overall performance result (including commissions) for this CBOE Covered Call position is as follows:
Covered Call Net Investment: $17,180.67
= ($178.50 - $6.70) * 100 shares + $.67 commission

Net Profit Components:
(a) Options Income: +$938.66
= ($6.70 + $2.70) * 100 shares - $1.34 commissions
(b) Dividend Income ($.55 ex-dividend on 5/30/2024): +55.00
(c) Capital Appreciation (If shares assigned at $172.50 strike price at options expiration): -$600.00 = +($172.50 - $178.50) * 100 shares

Total Net Profit (If CBOE shares assigned at $172.50 at the July 19th expiration): +$393.66

= (+$938.66 option income +$55.00 dividend income -$600.00 capital appreciation)

Absolute Return-on-Investment (If CBOE shares assigned at $172.50 at the July 19th, 2024 options expiration date): +2.3%

= +$393.66/$17,180.67

Equivalent Annualized Return-on-Investment: +12.9%

= (+$393.66/$17,180.67) * (365/65 days)