Covered Call on ET - Potential income return 3.6% in 60 days (21.88% annualized)

On September 25, 2020, we got assigned 100 shares with ET stock and we sold 1 covered call on this expiring on October 30, 2020. As we were deep in the money, we couldn’t get decent strikes nor decent premiums and ended up this trade with a tiny $4 premium (before commissions).

This trade comes as the #37 in the month of September, and according to our trading plan for this month, the premium generated makes us about 0.2% from our $800 monthly goal, while in total we have already reached 82.09% this month

here is our trade setup:

  • SLD 1 ET OCT 30 '20 6.5 Call Option 0.04 USD

what can happen next:

If ET is trading below our strike price of 6.5 at the expiry date (October 30, 2020) we keep the premium and sell more covered calls to lower our cost basis.

In case ET is trading above our strike price of $6.5, our shares get called away at the strike price of $6.5 and we realize our max gain $23.4 (we made additional premium we sold put options), or 3.6% potential income in 60 days.

Our break-even price: $6.27

  • Running Total 23 Trades since April 6, 2020

  • Options income: $333