Roll Forward and up 1 Covered Call on VTRS - Potential income return -10.36% in 94 days
On April 29, 2021, we roll forwarded 1 covered call on VTRS stock expiring on May 14, 2021. For this trade, we got $15 (before commissions)
As we have been buying VTRS using dollar-cost averaging our average buy price is: $16.48
here is our trade setup:
SLD 1 VTRS May 14 23 '21 14 Call Option 0.15 USD
what can happen next:
VTRS is trading below our strike price of $14 at the expiry date (May 14, 2021), in such case, we keep the premium and sell more covered calls to lower our cost basis.
In case VTRS is trading above our strike price of $14, our 100 shares get called away at the strike price of $14 and we realize our max gain negative - $170.8 or -10.36% potential total income loss in 94 days
Break-even: $15.75