Roll Forward and Roll UP BAC AUG 28 '20 28.5 Covered Call Option 0.10 USD (2.82% potential income in 84 days)

On August 3, 2020, we roll forward and roll up 1 covered call on BAC stock  - a position originally established at the start of June with the strike price of $29.00, see: Covered Call on BAC - Potential income return 3.52% in 5 days. For this roll forward covered call we got an additional $10 (before commissions). 

BAC is our "worst" investment as of now, we bought 100 shares at $28.67, and shortly after our buy BAC dipped to $23-$24 range, making it harder for us to get a decent options income, without sacrificing our strike prices. 

After our previous roll forward expired worthless, we were able to increase strike price by 50 cents up to $28.50, which is under our bought price just by 17 cents, as we have also collected some premium since June, we will break even and earn some little income if assigned at $28.50

This trade comes as the #2 in the month of August, and if we stick with our trading plan for this month, the premium generated from this trade makes us about 1.01% from our $750 monthly goal, while in total we have already reached 1.30% from our monthly goal

here is our trade setup:

  • SLD 1 BAC AUG 28 '20 28.5 Call Option 0.10 USD

what can happen next:

BAC is trading below our strike price of $28.5 at the expiry date (August 28, 2020), in such a case, we keep the premium and sell more covered calls to lower our cost basis. 

In case BAC is trading above our strike price of $28.5, our 100 shares get called away at the strike price of $28.5 and we realize our max gain $81 or 2.82% potential income in 84 days

Break-even: $27.70

Selling covered calls with BAC stock
Selling covered calls with BAC stock

  • Running Total  8 Trades since June 8, 2020
  • Options Income: $119