Covered Call on Deutsche Bank (FRA:DBK) - Potential income return 2.48% in 11 days (82.28% annualized)

On September 21, 2020, we sold 1 covered call on Deutsche Bank (FRA:DBK)) stock expiring on October 2, 2020. For this trade, we got a EUR 23 premium (before commissions).

Deutsche Bank AG is a German multinational investment bank and financial services company headquartered in Frankfurt, Germany, and dual-listed in New York Stock Exchange and Frankfurt Stock Exchange. The bank's network spans 58 countries with a large presence in Europe, the Americas and Asia

This trade comes as the #27 in the month of September, and according to our trading plan for this month, the premium generated from this trade makes us about 2.68% from our $800 monthly goal, while in total we have already reached 63.88% this month

Buy the rumor, sell the news, or I turned on CNBC news - Leaked U.S. government files suggest Deutsche Bank tops the list of suspicious transactions.

Hmm, I thought. I have been watching this stock) (Deutsche Bank for a while already. (It seems I just love bank stocks, seems I have them all - Bank of America, Wells Fargo, Peoples United, ING (Dutch stock), Barclays (British), now let's add Germany. For downside protection did a covered call, if expires worthless I just made a couple of EUR out of thin air, if called away some 2.5% yield in 11 days. Whatever happens, I'm happy with my buy

here is our trade setup:

  • BOT 100 DBK Stock 7.368EUR

  • SLD 1 DBK OCT 2 '20 7.4 Call Option 0.23 EUR

what can happen next:

DBK is trading below our strike price of EUR 7.4 at the expiry date (October 2, 2020), in such case, we keep the premium and sell more covered calls to lower our cost basis. 

In case DBK is trading above our strike price of EUR 7.4, our 100 shares get called away at the strike price of EUR 7.4 and we realize our max gain EUR 18.25 or 2.48% potential return of income in 11 days

Break-even: EUR 7.21

  • Running Total  2 Trades since September 21, 2020

  • Options income: EUR 15