On August 28, 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 $13 (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. Now with BAC bouncing back to the levels of $26 per share we were able to take larger premium in shorter time.
After our previous roll forward expired worthless, we were able to increase strike price by 50 cents up to $29, which is now just above our bought price
- Roll Forward and Roll UP BAC AUG 28 '20 28.5 Covered Call Option 0.10 USD (2.82% potential income in 84 days)
- Roll Forward and Roll Down BAC JUL 31 '20 28 Covered Call Option 0.19 USD (0.76% potential income in 52 days)
This trade comes as the #56 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 1.41% from our $750 monthly goal, while in total we have already reached 121.87% from our monthly goal
here is our trade setup:
- SLD 1 BAC SEP 18 '20 29 Call Option 0.13 USD
what can happen next:
BAC is trading below our strike price of $29 at the expiry date (September 18, 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 $29, our 100 shares get called away at the strike price of $29 and we realize our max gain $141.6 or 4.83% potential income in 105 days
- Running Total 9 Trades since June 8, 2020
- Options Income: $130