Sold 1 Naked Call on NIO - Potential income return 1.05% in 23 days

On March 24, 2021, we sold 1 naked call on NIO stock expiring on April 16, 2021. For this trade, we got a $53 premium (before commissions).

This trade comes as #162 in the month of March, according to our trading plan for this month, the premium generated from this trade makes us about 2.53% from our $2,000 monthly goal. While in total we have reached already 310.29% 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:

  • SLD 1 NIO APR 16 '21 48 Call Option 0.53USD

what can happen next:

NIO is trading below our strike price of $48 at the expiry date (April 16, 2021), in such case, we keep the premium and maybe sell more naked calls.

In case NIO is trading above our strike price of $48, we are troubled as we have to deliver 100 shares at the price of USD 48, to avoid that we will try to roll up and for credit. Our max gain $50.6 or 1.05% potential total income return in 23 days

Break-even: $48.50