Sold 4 Covered Calls on SmileDirectClub (NASDAQ:SDC) - Potential income return 7.52% in 29 days

On January 8, 2021, we sold 4 covered calls on SmileDirectClub (NASDAQ:SDC)  stock expiring on January 22, 2021. For this trade, we got a $100 premium (before commissions)

This trade comes as the #8 in the month of January, according to our trading plan for this month, the premium generated from this trade makes us about 3.61% from our $2,500 monthly goal. While in total we have reached already 15.12% so far. Awesome.

We sold these covered calls just shortly after we got assigned 400 shares at $13 each, see: Sold 4 Credit Spreads on SDC – 1.93% potential income return in 15 days

here is our trade setup:

  • SLD 4 SDC JAN 22 '21 13.5 Call Option 0.25 USD

what can happen next:

SDC is trading below our strike price of $13.5 at the expiry date (January 22, 2021), in such case, we keep the premium and sell more covered calls to lower our cost basis. 

In case SDC is trading above our strike price of $13.5, our 400 shares get called away at the strike price of $13.5 and (as we have already collected some premium from selling puts in the past) we realize our max gain $391.2 or 7.52% potential return of income in 29 days

Break-even: $12.53

Selling covered calls with SDC stock
Selling covered calls with SDC stock

 

  • Running Total 54 Trades since April 27, 2020

  • Options income: $13.83