September 29th, 2023 Options Expiration Results

The Covered Calls Advisor Portfolio had two Covered Calls positions with September 29th, 2023 options expirations.  The position containing 500 shares in Uber Technologies Inc. $45.00 strike price position closed in-the-money at $45.99 on yesterday's options expiration date, so the five Calls expired and the shares were called away (i.e. sold) at the $45.00 strike price.  The second position in Match Group Inc. closed out-of-the-money yesterday, so the Calls expired and the 400 Match Group shares remain in the Covered Calls Advisor Portfolio.  A summary of the results for both positions is as follows:

1. Uber Technologies Inc. -- +0.9% absolute return (equivalent to +31.5% annualized return-on-investment) for the 11 days of this investment.  The original post detailing this Covered Calls position is here. 

2. Match Group Inc. -- Match Group's price closed out-of-the-money yesterday at $39.175 which was below its $41.00 strike price, so the four 9/29/20233 Call options expired and 400 MTCH shares now remain in the Covered Calls Advisor Portfolio.  Early next week a decision will be made to either close out the position by selling the shares or continuing with this Covered Calls position by selling four MTCH Calls against the 400 shares of stock currently owned.  The original post detailing this Covered Calls position is here.  

Jeff Partlow

The Covered Calls Advisor
partlow@cox.net

September 22nd, 2023 Options Expiration Results

The Covered Calls Advisor Portfolio had one Covered Calls position in The Walt Disney Company at the September 22nd, 2023 options expiration date and at the $78.00 strike price.  The position closed in-the-money yesterday at $81.32 per share, so the Call options expired and the 200 Disney shares were sold at their $78.00 strike price with the following result:

The Walt Disney Company (DIS) -- +1.6% absolute return (equivalent to +38.4% annualized return-on-investment) for the 15 days of this Covered Calls investment.  The original blog post details when this position was established is here. 

I welcome your questions or feedback at the email address below on any topics related to the Covered Calls investing strategy.  

Jeff Partlow
The Covered Calls Advisor
partlow@cox.net

Covered Call Position Established in Microsoft Corporation

With only ten minutes remaining until the market close today, my buy/write net debit limit order was executed and 100 shares of Microsoft Corporation (ticker symbol MSFT) stock were purchased at $316.80 and 1 October 6th, 2023 $310.00 Call option was sold at $10.78 per share -- a net debit of $306.02 per share.  So, the potential time value profit if the stock is in-the-money and therefore closed out by assignment at expiration is $3.98 per share [$10.78 Call option premium - ($316.80 stock purchase price - $310.00 strike price)].  The Delta was 66.2 which closely approximates a probability of assignment on the options expiration date of 66.2%.  

Microsoft achieved fourteen of the fifteen filters in my Growth Stock screener and the average analysts' target price for Microsoft is $386.95 which is +22.1% above today's purchase price.  

As detailed below, a potential outcome for this Microsoft Corporation investment is +1.3% absolute return-on-investment for the next 14 days (equivalent to +33.8% annualized-return-on-investment) if the stock closes above the $310.00 strike price on the October 6th, 2023 options expiration date.

Microsoft Corporation (MSFT) -- New Covered Call Position

The net debit buy/write limit order was executed as follows:
9/22/2023 Bought 100 shares of Microsoft stock @ $316.80 per share.  
9/22/2023 Sold 1 MSFT October 6th, 2023 $310.00 Call option @ $10.78 per share.

A possible overall performance result (including commissions) if this position is assigned on its 10/6/2023 option expiration date is as follows:
Covered Calls Net Investment: $30,602.67
= ($316.80 - $10.78) * 100 shares + $.67 commission

Net Profit Components:
(a) Options Income: +$1,077.33
= ($10.78 * 100 shares) - $.67 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If Microsoft stock is above the $310.00 strike price at the October 6th option expiration date): -$680.00
= ($310.00 - $316.80) * 100 shares

Potential Total Net Profit (If assigned at expiration): +$397.33
= (+$1,077.33 option income + $0.00 dividend income - $680.00 capital appreciation)

Potential Absolute Return-on-Investment: +1.3%
= +$397.33/$30,602.67
Potential Equivalent Annualized-Return-on-Investment: +33.8%
= (+$397.33/$30,602.67) * (365/14 days)

Continuation of Covered Calls Positions in iShares China Large-Cap ETF

Last Friday, the September 15th, 2023 Covered Calls positions in iShares China Large-Cap ETF (ticker FXI) closed out-of-the-money.  So the 10 Call options expired and the 1,000 shares remained in the Covered Calls Advisor Portfolio.  This morning, I decided to continue this Covered Calls positions by selling 10 Call options to rollout to the October 13th, 2023 options expiration date.  The transactions-to-date for this position as well as potential return-on-investment results if the position is assigned on its Oct. 13th, 2023 options expiration date is detailed below.

iShares China Large-Cap ETF (FXI) -- Continuation of Covered Calls Position

The original Buy/Write transaction was as follows:
9/1/2023 Bought 1,000 shares of iShares China Large-Cap ETF @ $27.99 per share.  
9/1/2023 Sold 10 FXI Sept. 15th, 2023 $28.00 Call options @ $.63 per share.
9/15/2023 Ten FXI Call options closed out-of-the-money, so these options expired and 1,000 shares remain in the Covered Calls Advisor Portfolio.
9/22/2023 Continued this iShares China Large-Cap ETF Covered Calls position by selling 10 FXI October 13th, 2023 Call options at the $27.50 strike price for $.60 per share.  The iShares China Large-Cap ETF share price was $27.21 when these Calls were sold and their Implied Volatility was 27.7.

A possible overall performance results (including commissions) for this iShares China Large-Cap ETF Covered Calls position if assigned on the 10/13/2023 options expiration date is as follows:
FXI Covered Calls Net Investment: $27,366.70
= ($27.99 - $.63) * 1,000 shares + $6.70 commission

Net Profit:
(a) Options Income: +$1,216.60
= ($.63 + $.60) * 1,000 shares - $13.40 commission
(b) Dividend Income: +$0.00
(c) Capital Appreciation (If 1,000 iShares China Large-Cap ETF shares assigned at the $27.50 strike price at the 10/13/2023 expiration): -$490.00
+($27.50 - $27.99) * 1,000 shares

Total Net Profit Potential (If 1,000 iShares China Large-Cap ETF shares assigned at the $27.50 strike price at the options expiration date): +$726.60
= (+$1,216.60 options income +$0.00 dividend income -$490.00 capital appreciation)

Potential Absolute Return-on-Investment: +2.7%
= +$726.60/$27,366.70
Potential Annualized Return-on-Investment: +23.1%
= (+$726.60/$27,366.70) * (365/42 days)