On April 1, 2022, I bought 200 shares of NYSE: DB stock paying $12.98 per share and simultaneously sold 2 covered calls on them with a strike price of $13 and expiry next Friday. Credit received $32 (per contract / before commissions)
This is not trading advice. Investments in stocks, funds, bonds, or cryptos are risk investments and you could lose some or all of your money. Do your due diligence before investing in any kind of asset.
Deutsche Bank has been on my radar for a while, in fact, I have traded in the past, but not recently. I decided to play safe with ‘investing with covered calls’ and bought just 200 shares to get my feet wet.
here is the trade setup:
BOT 200 DB Stock 12.98 USD
SLD 2 DB APR 08 '22 13 Call Option 0.32 USD
I bought 200 shares at $12.98 apiece, in total paying $2,596, and sold 2 covered calls with the next Friday’s expiry, for which I received a premium of $64 (before commissions)
What happens next?
On the expiry date, April 08, 2022, NYSE: DB is trading under $13 per share - options expire worthlessly and I keep premium and start over - if BAC trades above $13 on the expiry date, my 200 shares will get called away and I realize my max profit $58.2 ($-1 value gain and $59.2 options premium) or potential 2.27% income yield in 7 days.
Break-even price: $12.98-$0.29= $12.69
Running Total 2 Trades since April 1, 2022
Options income: $54