Established 2 New Covered Calls on SDC; Potential Income return 9.69% in 53 days

In September 2021, I got assigned 200 shares with SDC stock at the price of $6.5 per share.

This trade was originally established as a credit spread back at the end of July 2021, see: Sold 5 Credit Spreads on SDC – 5.12% potential income return in 39 days

Originally I opened 5 credit spreads on SDC stock, but after the stock dropped significantly, I decided to roll most of the contracts and lower the strike prices.

Here is the trade setup:

  • BOT 200 SDC Stock 6.5 USD (assigned)

  • SLD 2 SDC SEP 17 '21 6.5 Put Option 0.29 USD

What happens next?

On the expiry date, September 17, 2021, SDC is trading under $6.5 per share -  options expire worthlessly and I keep premium - if SDC trades above $6.5 on the expiry date, my 200 shares will get called away and I realize my max gain

When originally setting up the credit spread I already got $0.37 per share, my new break-even price for this trade then is $6.5-$0.37-$0.26= $5.87