Continuation of Covered Calls Position in Match Group Inc.

The Covered Calls Advisor Portfolio has a Covered Calls position in Match Group Inc. (ticker MTCH) which expired last Friday with the stock at $32.68 which was below the $34.00 strike price.  Today this position was continued by rolling out to the May 3rd, 2024 weekly options expiration at the $33.50 strike price by selling-to-open six Calls at $.80 per share when the price of Match Group stock was $32.75.  

As detailed below, a potential outcome for this Match Group investment if the stock is in-the-money and therefore assigned on the options expiration date is +2.0% absolute return-on-investment over 31 days (equivalent to +24.1% annualized-return-on-investment) if the stock closes above the $33.50 strike price on the May 3rd, 2024 options expiration date.  The transactions history of this Match Group Covered Calls position to-date along with a potential return-on-investment result if the stock is assigned on the May 28th, 2024 options expiration date is as follows:

Match Group Inc. (MTCH) -- Continuation of Covered Calls Position

The buy/write transaction was:
4/2/2024 Bought 600 Match Group Inc. shares @ $35.28.
4/2/2024 Sold 6 MTCH 4/12/2024 $34.00 Call options @ $1.68 per share.  The Implied Volatility of these Calls was 34.4 when this transaction was made.
4/12/2024 Match Group stock price was below the $34.00 strike price, so the Calls expired and the 600 MTCH shares remained in the Covered Calls Advisor Portfolio. 

4/15/2024 Continued this Match Group Covered Calls position by selling six May 3rd, 2024 $33.50 Call options @ $.80 per share when the stock was trading today at $32.75.  

An overall performance result (including commissions) for this Match Group Covered Calls position if the stock price is above the $33.50 strike price on the options expiration date is as follows:
Match Group Covered Calls Net Investment: $20,164.02
= ($35.28 - $1.68) * 600 shares + $4.02 commission

Net Profit:
(a) Options Income: +$1,479.96
= ($1.68 + $.80) * 600 shares - $8.04 commissions
(b) Dividend Income: +$0.00
= ($0.00 dividends per share x 600 shares)
(c) Capital Appreciation (If MTCH shares assigned at $33.50 strike price at expiration): -$1,068.00
+($33.50 strike price - $35.28 stock purchase price) * 600 shares

Total Net Profit (If options exercised on the 5/3/2024 options expiration date): +$411.96

= (+$1,479.96 options income +$0.00 dividend income -$1,068.00 capital appreciation)

Potential Absolute Return-on-Investment (If the Match Group Inc. shares are assigned at the $33.50 strike price at the May 3rd, 2024 options expiration date): +2.0%

= +$411.96/$20,164.02

Potential Annualized Return-on-Investment (If 600 Match Group shares assigned at $33.50 at the 5/3/2024 options expiration date): +24.1%

= (+$411.96/$20,164.02) * (365/31 days)

Established Covered Calls Position in APA Corporation

A Covered Calls position was established in APA Corporation (ticker APA) when my buy/write limit order for the April 26th, 2024 $34.00s executed at a net debit price of $33.45.  Four hundred APA shares were purchased at $34.87 and 4 April 26th, 2024 $34.00 Calls were sold at $1.42 per share.  So, the corresponding time value (aka extrinsic value) was $.55 per share = [$1.42 Call options premium - ($34.87 stock purchase price - $34.00 strike price)].  

APA, formerly known as Apache, is a worldwide oil and gas exploration and production company based in Houston.  Given the Covered Calls Advisor's current Neutral Overall Market Meter outlook, a slightly in-the-money Covered Calls position was established.  The probability that the position will close in-the-money on the April 26th weekly options expiration date is 65.8%.  In addition, the Implied Volatility of the Calls was 27.2 which, as desired, is well above the VIX which is now 15.4. 

APA Corp. goes ex-dividend at $.25 per share which is a 2.9% annualized dividend yield at today's stock purchase price.  This dividend is included in the potential return-on-investment results shown below.  As preferred, there is no earnings report prior to the options expiration date and analysts' current stock target price is $41.27 per share (+18.4% above today's purchase price).  APA also meets all eleven filters in my Large-Cap Sustainable Competitive Advantage stock screener.

As detailed below, two potential return-on-investment results for this APA Covered Calls position are: (a) +1.6% absolute return-on-investment (equivalent to +59.3% annualized return-on-investment for the next 10 days) if the stock is assigned early [i.e. on April 18th which is the last trading day prior to the April 19th ex-dividend date]; OR (b) +2.4% absolute return-on-investment (equivalent to +50.9% annualized return-on-investment over the next 17 days) if the stock is assigned on the April 26th, 2024 options expiration date. 

APA Corporation (APA) -- New Covered Calls Position
The simultaneous buy/write transactions was as follows:
4/9/2024 Bought 400 shares of APA Corporation stock @ $34.87 per share.  
4/9/2024 Sold 4 APA April 26th, 2024 $34.00 Call options @ $1.42 per share.
4/19/2024 Upcoming ex-dividend at $.25 per share

The overall performance results (including commissions) would be as follows:
Covered Calls Cost Basis: $13,382.68
= ($34.87 - $1.42) * 400 shares + $2.68 commission

Net Profit Components:
(a) Options Income: +$565.32
= ($1.42 * 400 shares) - $2.68 commission
(b) Dividend Income (If APA stock assigned on the April 19th ex-dividend date): $0.00
(b) Dividend Income (If APA stock assigned on the April 26th, 2024 options expiration date): +$100.00
= $.25 dividend per share x 400 shares
(c) Capital Appreciation (If APA stock assigned on the April 19th ex-dividend date): -$348.00
= ($34.00 strike price - $34.87 stock purchase price) * 400 shares
(c) Capital Appreciation (If APA stock is above the $34.00 strike price and therefore assigned at the April 26th options expiration date): -$348.00
= ($34.00 - $34.87) * 400 shares

1. Potential Net Profit (If APA shares assigned on 4/18/2024, the day prior to the April 19th ex-dividend date): +$217.32
= (+$565.32 options income +$0.00 dividend income - $348.00 capital appreciation)
2. Potential Net Profit (If APA stock price is above $34.00 strike price at the April 26th options expiration): +$317.32
= (+$565.32 options income +$100.00 dividend income - $348.00 capital appreciation)

1. Potential Absolute Return-on-Investment (If APA shares assigned on 4/18/2024, the day prior to the 4/19/2024 ex-dividend date): +1.6%
= +$217.32/$13,382.68
Potential Equivalent Annualized Return-on-Investment (If assigned early on day prior to ex-div date): +59.3%
= (+$217.32/$13,382.68) * (365/10 days)

2. Potential Absolute Return-on-Investment (If APA price is above $34.00 strike price and therefore assigned at the April 26th options expiration): +2.4%
= +$317.32/$13,382.68
Potential Equivalent Annualized Return-on-Investment (If assigned on the 4/26/2024 options expiration date): +50.9%
= (+$317.32/$13,382.68) * (365/17 days)

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 Calls position using the Covered Calls Advisor's Dividend Capture strategy.  As shown below, all nine criteria are achieved for this APA Corporation Covered Calls position.

Continuation of Covered Calls Position in Mondelez International Inc.

The Covered Calls Advisor Portfolio has a Covered Calls position in Mondelez International Inc. (ticker MDLZ) which expired last Friday with the stock at $67.99 which was below the $71.00 strike price at last Friday's options expiration.  An important reason why the stock price has declined recently is that the price of cocoa has spiked by 40% during the last month and among the companies owned by Mondelez are Cadbury and Toblerone.  Today this position was continued by rolling out to the April 19th, 2024 monthly options expiration date at the $69.00 strike price by selling-to-open three Calls at $.50 per share this morning when the price of Mondelez stock was $68.16.  This two-week extension to a 4/19/2024 expiration is prior to their next quarterly earnings report which is on April 25th and is an effort to repair the unrealized loss in this position back closer to breakeven.  

As detailed below, a potential outcome for this Mondelez investment if the stock is in-the-money and therefore assigned on the options expiration date is -1.0% absolute return-on-investment over 31 days (equivalent to -11.5% annualized-return-on-investment) if the stock closes above the $69.00 strike price on the April 19th, 2024 options expiration date.  The transactions history of this Mondelez Covered Calls position to-date along with a potential return-on-investment result if the stock is assigned on the 4/19/2024 options expiration date is as follows:

Mondelez International Inc. (MDLZ) -- Continuation of Covered Calls Position

The buy/write transaction was:
3/19/2024 Bought 300 Mondelez shares @ $72.25
3/19/2024 Sold 2 MDLZ 4/5/2024 $71.00 Call options @ $1.65 per share.  The Implied Volatility of these Calls was 11.9 when this position was established.

4/5/2024 Call options expired out-of-the-money and the 300 MDLZ shares remain in the Covered Calls Advisor Portfolio.

4/8/2024 Continued this Covered Calls position by selling 3 MDLZ April 19th, 2024 $69.00 Call options against the 300 shares owned.

A possible overall performance result (including commissions) if the stock closes above the $69.00 strike price on the 4/19/2024 options expiration date would be as follows:
Covered Calls Net Investment: $21,182.01
= ($72.25 - $1.65) * 300 shares + $2.01 commission

Net Profit Components:
(a) Options Income: +$640.98
= ($1.65 + $.50) * 300 shares - $4.02 commissions
(b) Dividend Income: +$127.50
= $.425 per share x 300 shares
(c) Capital Appreciation (If MDLZ shares assigned with stock above the $69.00 strike price at the April 19th options expiration): -$975.00
= ($69.00 -$72.25) * 300 shares

Potential Net Profit (If Mondelez price is above $69.00 strike price at the April 19th options expiration): -$206.52
= (+$640.98 options income +$127.50 dividend income - $975.00 capital appreciation)

Absolute Return-on-Investment (If MDLZ price is above $69.00 strike price at the April 19th options expiration date): -1.0%
= -$206.52/$21,182.01
Equivalent Annualized Return-on-Investment (If assigned on the 4/5/2024 options expiration date): -11.5%
= (-$206.52/$21,182.01) * (365/31 days)

April 5th, 2024 Options Expiration Results

The Covered Calls Advisor Portfolio had two Covered Calls positions with April 5th, 2024 options expirations.  The position containing 500 shares in KraneShares CSI China Internet ETF (ticker KWEB) at the $25.50 strike price closed in-the-money at $26.58 on yesterday's options expiration date.  So, the five Calls expired and the shares were called away (i.e. sold) at the $25.50 strike price.  The second position in Mondelez International Inc. closed out-of-the-money yesterday so the Calls expired and the 300 MDLZ shares remain in the Covered Calls Advisor Portfolio.  A summary of the results for both positions is as follows:

1. KraneShares CSI China Internet ETF -- +2.3% absolute return (equivalent to +40.5% annualized return-on-investment) for the 21 days of this investment.  The original post detailing this Covered Calls position is here. 

2. Mondelez International Inc. -- Mondelez closed out-of-the-money yesterday at $67.99 which was below its $71.00 strike price, so the three 4/5/2024 Call options expired and 300 Mondelez 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 three MDLZ Calls against the 300 shares currently owned.  The original post detailing this Covered Calls position is here.  

Jeff Partlow

The Covered Calls Advisor
partlow@cox.net