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There's no interest penalty on the buy-write. It's not costing you any interest, you just aren't making interest. So interest is a zero, not -15.58. That raises the gain and ROI % accordingly.Yes, this is correct! And it's where my calculation went wrong! Thanks.
A better way to consider the whole thing is to create two [fictional] accounts, place $50,000 into each account, and then run the theoretical trades through each account and see how much each account is worth after the theoretical 10 months when the trade ends.
Buy stock, sell call:
Balance $50k 50,000
Buy 100 shares -47,000
Sell 1 call-500 2,500
Deliver 100 shares 50,000
Interest on bal 192.50
Value at end 55692.50
PERCENT GAIN = 12.79% (5692.50 / 44,500)
Sell cash covered put:
Balance $50k. 50,000
Sell 1 put-500 3,900
Expires worthless
Interest on bal 1,886.50
Value at end 55786.50
PERCENT GAIN - 12.55% (5786.50 / 46,100)
