Covered Call on CRBP - Potential income return 9.04% in 8 days

On September 10, 2020, we sold 2 covered calls on CRBP stock expiring on September 18, 2020. For this trade, we got a $43.2 premium (after commissions).

Corbus Pharmaceuticals Holdings, Inc. is a Phase 3 clinical-stage pharmaceutical company focused on the development and commercialization of novel therapeutics to treat inflammatory and fibrotic diseases by leveraging its pipeline of rationally designed, endocannabinoid system-targeting drug candidate

This trade comes as the #14 in the month of September, and if we stick with our trading plan for this month, the premium generated from this trade makes us about 5.4% from our $800 monthly goal, while in total we have already reached 23.52% this month

Here is our trade setup:

  • BOT 200 CRBP Stock 2.49 USD

  • SLD 2 CRBP SEP 18 '20 2.5 Call Option 0.24 USD

Which reads - we bought 200 shares of CRBP paying $2.49 per share, in total $498, and also we sold 2 covered calls with the strike price set at $2.5 for what we got $0.24 premium per share, in total $48 (before commissions)

what can happen next:

CRBP is trading below our strike price of $2.5 at the expiry date (September 18, 2020), in such a case, we keep the premium and sell more covered calls to lower our cost basis.

In case CRBP is trading above our strike price of $2.5, our 200 shares get called away at the strike price of $2.5 and we realize our max gain $45.2+ or 9.07% potential income in 8 days

If our shares will get called away, from the returning money we will buy shares with NCV

Break-even: $2.25

  • Running Total 6 Trades since August 27, 2020

  • Options income: $116