Covered Calls Established in Citigroup Inc.

Today, a new Covered Calls position was established in Citigroup Inc. (ticker C).   It was established for the May 18th, 2018 options expiration date and given the Covered Calls Advisor's current Overall Market Meter sentiment of Neutral, an in-the-money position at the $67.50 strike price was entered when the stock was at $69.73 per share.

As shown below, a potential result is +1.6% absolute return in 26 days (equivalent to a +22.9% annualized return-on-investment). 

Citigroup Inc.(C) -- New Covered Calls Position

The implied volatility of the Call options was 24.9 when this position was established.  There is no intervening earnings report prior to expiration.  An expected $.32 dividend with an ex-dividend date prior to the May 18th options expiration date is expected and is included in the potential results detailed below.

The transactions were as follows:
04/23/2018 Bought 500 shares of Citigroup stock @ $69.73 per share 
04/23/2018 Sold 5 Citigroup May 18th, 2018 $67.50 Call options @ $3.01 per share
Note: this was a simultaneous Buy/Write transaction

A possible overall performance result (including commissions) would be as follows:
Covered Calls Cost Basis: $33,368.30
= ($69.73 - $3.01)* 500 shares + $8.30 commission

Net Profit Components:
(a) Options Income: +$1,505.00
= ($3.01* 500 shares)
(b) Dividend Income: +$160.00 = $.32 per share * 500 shares 
(c) Capital Appreciation (If Citi is above $67.50 strike price at May 18th expiration): -$1,119.95
= ($67.50 -$69.73)* 500 shares - $4.95 commission

Total Net Profit: +$545.05
= (+$1,505.00 options income +$160.00 dividend income -$1,119.95 capital appreciation)

Absolute Return: +1.6%
= +$545.05/$33,368.30
Equivalent Annualized Return: +22.9%
= (+$545.05/$33,368.30)*(365/26 days)

The downside 'breakeven price' at expiration is at $66.40 ($69.73 - $3.01 -$.32), which is 4.8% below the current market price of $69.73.

Using the Black-Scholes Options Pricing Model, the probability of making a profit (if held until the May 18th, 2018 options expiration) for this Citigroup Covered Calls position is 69.8%, so the expected value annualized ROI of this investment (if held until expiration) is +16.0% (+22.9% * 69.8%).