Roll forward and Up 1 Naked Call on NIO - Potential income return 3.64% in 51 days

On March 24, 2021, we roll forwarded and rolled up 1 naked call on NIO stock expiring on April 30, 2021. The aftermath of this trade +$37 in premium (before commissions) and rolled up strike prices.

These trades come as the #168 and #169 in the month of March, according to our trading plan for this month, the premium generated from this trade makes us about 4.68% from our $2,000 monthly goal.  While in total we have reached already 334.93% so far. Awesome.

We prefer selling covered calls over naked, but this time we decided to take the risk, as it offered to free up some margin.

NIO is a Chinese automobile manufacturer headquartered in Shanghai, specializing in designing and developing electric vehicles. 

here is our trade setup:

  •  BOT    1    NIO    + APR 09 '21 45 Call - APR 30 '21 47 Call Diagonal Spread    -0.37  USD

the aftermath of this trade +$171.4, we closed strike $45 and opened a new strike three weeks in the future but with a higher $47 strike   

what can happen next:

NIO is trading below our strike price of $47 at the expiry date (April 30, 2021), in such case, we keep the premium and maybe sell more naked calls.

In case NIO is trading above our strike price of $47, we are troubled as we have to deliver 100 shares at the price of $45, to avoid that we will try to roll up and for credit. Our max gain $171.4 or 3.64% potential total income return in 51 days

Break-even: $48.71