Covered Call on NRZ - Potential income return 5.34% in 17 days

On August 4, 2020, we sold 1 covered call on NRZ stock expiring on August 21, 2020. For this trade, we got a $22 premium (before commissions).

This trade comes as the #5 in the month of August, and if we stick with our trading plan for this month, the premium generated from this trade makes us about 2.61% from our $750 monthly goal, while in total we have already reached 12.34% from our monthly goal so far.

here is our trade setup:

  • BOT 50 NRZ Stock 7.78 USD
  • SLD 1 NRZ AUG 21 '20 9 Call Option 0.22 USD

what can happen next:

NRZ is trading below our strike price of $8 at the expiry date (August 21, 2020), in such a case, we keep the premium and sell more covered calls to lower our cost basis. 

In case NRZ is trading above our strike price of $8, our 100 shares get called away at the strike price of $8 and we realize our max gain $41.6 (800-788+19.6 ) or 5.34% potential income in 17 days

Break-even: $7.59

Selling covered calls with NRZ stock
Selling covered calls with NRZ stock
  • Running Total  12 Trades since April 9, 2020
  • Options income: $250