Covered Call Trade Idea with Monthly Options - Generate EUR 36/mo from this Germany's (DAX) Blue Chip Stock

This is not a trade recommendation, this is a trade idea. I'm not a financial advisor, anything written here should be taken with a grain of salt. I take no responsibility If you will decide to invest

Here at, we like the idea of selling options on "good" dividend stocks, preferably from the Dow Jones list, but we make exceptions, and one such exception is Germany's Dax Index, Inc. 

There are a couple of stocks we like there, but one is we like the most (for options trading)- Deutsche Bank (ETR: DBK).

As we like trading bank stocks (in our arsenal there is ING bank from the Netherlands, Bank of America, PBCT, and WFC from the US), just obvious Deutsche Bank popped on our radar.

Top 30 Dividend Paying Stocks in Germany (DAX Index)

Deutsche Bank AG is a global Multinational Investment bank and financial services company headquartered in Frankfurt, Germany and dual-listed in New York Stock Exchange and Frankfurt Stock Exchange.

Generate monthly income selling covered calls on ETR:DBK stock

On May 28, 2020, you could buy 100 shares of ETR:DBK stock spending EUR 7.95per share or EUR 795, and simultaneously sell out of the money June 19 expiry covered call at the strike price of EUR 8.2 for about EUR 0.36. That gets you EUR 36 and makes about a 4.5% return in  22 days. About 74.65% annualized. Break-even: EUR 7.59

If ETR:DBK stock closes below EUR 8.2 on June 19, you keep the premium and start over.

If the stock closes above EUR 8.2, your stock gets called away, but you keep premium EUr 0.36 + realize value gain EUR 0.25 (EUR 8.2- EUR7.95) from selling stock higher than you bought. Total EUR 61 or about 7.6% potential income return in 22 days.

There are several options you could use not to get shares called away, like a roll-up or roll forward. Or you could sell the stock, and start over by writing cash-secured put and get stock back.

Remember, you are selling one contract, 100 shares of ETR:DBK stock, make sure you have 100 shares to sell if called away.

The biggest risk  - involving in covered call strategy - the stock price could fall below our buy price and stay there for months/years.