Covered Call on ET - Potential income return 5.46% in 56 days (35.54% annualized)

On October 9, 2020, we got assigned 100 shares with ET stock and we sold 1 covered call on this stock expiring on October 30, 2020. For this trade, we got a $20 premium (before commissions)

This trade comes as the #10 in the month of October, according to our trading plan for this month, the premium generated from this trade makes us about 2.93% from our $600 monthly goal, while in total we have already reached 18.77% so far.

here is our trade setup:

  • SLD 1 ET OCT 30 '20 6 Call Option 0.20 USD

what can happen next:

If ET is trading below our strike price of 6 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, our shares get called away at the strike price of $6 and we realize our max gain $32.8 (we made additional premium as we sold put options), or 5.46% potential income in 56 days.

Our break-even price: $5.68

Selling covered calls on ET stock
Selling covered calls on ET stock
  • Running Total 25 Trades since April 6, 2020

  • Options income: $350