Covered Call on Tilray (NASDAQ:TLRY) - Potential income return 6.5% in 50 days / 47.45% annualized

On October 2, 2020, we sold 1 covered call on TLRY stock expiring on October 23, 2020. For this trade, we got a $14 premium (before commissions)

Tilray is a Canadian pharmaceutical and cannabis company, incorporated in the United States with primary operations headquartered in Toronto, Ontario. Tilray also has operations in Australia, New Zealand, Germany, Portugal, and Latin America

This trade comes as the #3 in the month of October, according to our trading plan for this month, the premium generated from this trade makes us about 1.93% from our $600 monthly goal, while in total we have already reached 6.5% so far.

We sold this call, just shortly we got assigned 100 shares of TLRY, see:

here is our trade setup:

  • SLD 1 TLRY OCT  23 '20 5.5 Call Option 0.14 USD

what can happen next:

TLRY is trading below our strike price of $5.5 at the expiry date (October 23, 2020), in this case, we keep the premium and sell more covered calls to lower our cost basis. 

In case TLRY is trading above our strike price of $5.5, our 100 shares get called away at the strike price of $5.5 and (as we have already collected some premium from selling puts) we realize our max gain $36.8 or 6.5% potential income in 50 days

Break-even: $5.14

Selling Covered Calls with TLRY stock
Selling Covered Calls with TLRY stock
  • Running Total  17 Trades since July 23, 2020

  • Options income: $161