Sold 1 Covered Call on AMWL - Potential income return 12.23% in 17 days

On March 2, 2021, we sold 1 almost covered call on AMWL stock expiring on March 19, 2021. For this trade, we got a $11 premium (before commissions).

This trade comes as #6 in the month of March, according to our trading plan for this month, the premium generated from this trade makes us about 0.43% from our $2,000 monthly goal. While in total we have reached already 56.29% so far. Awesome.

We sold a covered call, despite we are holding just 60 shares with this stock. In case our strike price will get touched, we will have to buy the missing 40 stocks in the open market (~ $1,400). There are two reasons why we sold a covered, before reaching 100 shares:

  • it helped to increase our buying power
  • we feel confident enough to take this little risk

Amwell, formerly known as American Well, is a telemedicine company based in Boston, Massachusetts, that connects patients with doctors over secure video

As we have been buying AMWL using dollar-cost averaging our average buy price is: $31.26

here is our trade setup:

  • SLD 1 AMWL MAR 19 '21 35 Call Option 0.11 USD

what can happen next:

AMWL is trading below our strike price of $35 at the expiry date (March 19, 2021), in such case, we keep the premium and sell more covered calls to lower our cost basis. 

In case AMWL is trading above our strike price of $35, our 100 shares get called away at the strike price of $35 and we realize our max gain $382.6 or 12.23% potential total income return in 17 days

Break-even: $31.18

Selling covered calls with AMWL stock
Selling covered calls with AMWL stock
  • Running Total  5 Trades since November 19, 2020
  • Options income $113