On April 7, 2021, we bought back 1 covered call on O stock and additionally sold a new covered call with expiry further out on May 21, 2021. For this trade, we got a $40 premium (before commissions).The aftermath of this trade $118 (after commissions)
This trade comes as the #28 in the month of March, according to our trading plan for this month, the premium generated from this trade makes us about 5.37% from our $2,800 monthly goal. While in total we have reached already 53.93% this month so far. Awesome.
As we have been buying O using dollar-cost averaging our average buy price is: $61.16
here is our trade setup:
- BOT 1 O APR 16 '21 65 Call Option 0.68
- SLD 1 O MAY 21 '21 65 Call Option 1.53
what can happen next:
O is trading below our strike price of $65 at the expiry date (May 21, 2021), in such case, we keep the premium and sell more covered calls to lower our cost basis.
In case O is trading above our strike price of $65, our 100 shares get called away at the strike price of $65 and we realize our max gain of $502 or 8.20% potential total income return in 93 days