Sold 1 Covered Call on SOLO - Potential income return -20.16% in 7 days

On April 16, 2021, we sold 1 covered call on SOLO stock expiring on April 23, 2021 (weekly options). For this trade, we got a $7 premium (before commissions)

This trade comes as the #75 in the month of April, according to our trading plan for this month, the premium generated from this trade makes us about 0.16% from our $2,800 monthly goal.  While in total we have reached already 123.67% this month so far. Awesome.

We sold this covered call just shortly after we got assigned 100 shares at $6 each, see Roll Forward and Down 4+1 Credit Spreads on SOLO – 4.17% potential income return in 64 days

here is our trade setup:

  • SLD 1 SOLO APR 23 '21 4.5 Call Option 0.07 USD

what can happen next:

SOLO is trading below our strike price of $4.5  at the expiry date (April 23, 2021), in such case, we keep the premium and sell more covered calls to lower our cost basis. 

In case SOLO is trading above our strike price of $4.5, our 100 shares get called away at the strike price of $4.5 and (as we have already collected some premium from selling puts in the past) we realize our max loss -$121 or -20.16% potential return of income in 7 days

Break-even: $5.71