Covered Call on AMC - Potential income return 5.76% in 35 days (60.01% annualized)

On September 25, 2020, we got assigned 100 shares with AMC stock and we sold 1 covered call on this stock expiring on October 2, 2020. For this trade, we got some small but decent $14 premium (before commissions)

AMC Entertainment Holdings, Inc. is an American movie theater chain headquartered in Leawood, Kansas, and the largest movie theater chain in the world. Founded in 1920, AMC has the largest share of the U.S. theater market ahead of Regal and Cinemark Theatres.

This trade comes as the #38 in the month of September, and according to our trading plan for this month, the premium generated makes us about 1.45% from our $800 monthly goal, while in total we have already reached 83.54% this month

here is our trade setup:

  • SLD 1 AMC OCT 02 '20 5 Call Option 0.14 USD

what can happen next:

If ET is trading below our strike price of $5 at the expiry date (October 2, 2020) we keep the premium and sell more covered calls to lower our cost basis.

In case AMC is trading above our strike price of $5, our shares get called away at the strike price of $5 and we realize our max gain $28.8 (we made an additional premium when sold put options), or 5.76% potential income in 35 days.

Our break-even price: $4.72

  • Running Total 14 Trades since August 3, 2020

  • Options income: $211