Covered Call on BCS - Potential income return 6.34% in 24 days

On September 22, 2020, we sold 1 covered call on BCS stock expiring on October 16, 2020. For this trade, we got a small $10 premium (before commissions).

BCS - Barclays PLC - London headquartered multinationl bank holding company - Barclays plc is a British multinational investment bank and financial services company, headquartered in London, England. Apart from investment banking, Barclays is organised into four core businesses: personal banking, corporate banking, wealth management, and investment management

This trade comes as the #31 in the month of September, according to our trading plan for this month, the premium generated from this trade makes us about 0.95% from our $800 monthly goal, while in total we have already reached 72.36% so far this month

BCS is a dividend-paying stock (current yield is about 6% per anum) but unlike other dividend stocks - BCS is paying dividend only twice per year

Here is our trade setup:

  • BOT 100 BCS Stock 4.73 USD

  • SLD 1 BCS OCT 16 '20 5 Call Option 0.1 USD

what can happen next:

If BCS is trading below our strike price of $5 at the expiry date (October 16, 2020) we keep the premium and sell more covered calls to lower our cost basis.

In case BCS is trading above our strike price of $5, our shares get called away at the strike price $5 and we realize our max gain $30, or 6.34% potential income in 24 days.

Our break-even price: $4.66

  • Running Total 7 Trades since July 21, 2020

  • Options income: $33