Roll forward and up 1 Covered Call on SOLO - Potential income return +7.93% in 63 days
On April 23, 2021, we roll forwarded and up 1 covered call on SOLO stock expiring on June 18, 2021. For this trade, we got $21 (before commissions)
We have been in this trade since April 20, when we bought 100 shares with LI at $6
here is our trade setup:
SLD 1 SOLO JUN 18 '21 6 Call Option 0.21 USD
what can happen next:
SOLO is trading below our strike price of $6 at the expiry date (June 18, 2021), in such case, we keep the premium and sell more covered calls to lower our cost basis.
In case SOLO is trading above our strike price of $6, our 100 shares get called away at the strike price of $6 and (as we have already collected some premium from selling puts and calls in the past) we realize our max gain +$47.6 or +7.93% potential return of income in 63 days
Break-even: $5.53