If VST closes above $40 at expiration on February 16, we would earn $1.45 per share on $38.55 per share at risk, or 3.76%. Over 31 days, that would be an annualized return of 44.3%.
If we earn a $0.025 per share dividend at the end of this month, and if HPK closes above $15 at expiration, we’d be assigned and earn $1.425 per share on $13.60 per share at risk or 10.48%. Over 35 days, that would be an annualized return of 109.3%.
If BKE closes above $42.50 on February 16, our shares would be sold at $42.50 and we would earn, including dividends, $2.70 per share on $42.65 per share at risk, or 6.33%. Over a 37-day holding period, that would be an annualized return of 62.5%.
If we earn the dividend on January 30, and if CALM closes above $55 on February 16, we would earn $2.466 per share on $52.65 at risk, or 4.68%. Over a 37-day holding period, that would be a 46.2% annualized return.
This buy write on shares of dental and animal health supplier Patterson Companies (PDCO) is designed to capture a $0.26 per share dividend when the stock trades ex-dividend on January 18. The trade offers the potential for a 52% annualized return through February 16.