On March 15, 2022, I bought 100 shares of NYSE: SPCE stock paying $6.92 per share and simultaneously sold 1 covered call on them with a strike price of $7 and expiry this Friday. Credit received $27 (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.
I have been trading options with SPCE since its IPO back at the end of 2019. Unfortunately cannot say that with some great success, mostly I lose.
In fact, right now I’m holding 3 put options with SPCE stock, all deep under the water and by placing today’s trade I’m bit gambling. Looking at stock recovery, which might never actually come.
SPCE stock is down almost 50% YTD
here is the trade setup:
BOT 100 SPCE Stock 6.92 USD
SLD 1 SPCE MAR 18 '22 7 Call Option 0.27 USD
I bought 100 shares at $6.92 apiece, in total paying $692 and sold 1 covered call with this Friday’s expiry, for what I received a premium of $27 (before commissions)
What happens next?
On the expiry date, March 18, 2022, NYSE: SPCE is trading under $7 per share - options expire worthlessly and I keep premium - if SPCE trades above $7 on the expiry date, my 100 shares will get called away and I realize my max profit $32 ($24+$8) or potential 4.62% income yield in 4 days.
Break-even price: $6.92-$0.24= $6.68
I’m quite optimistic about this buy and looking to hold this stock at least till July 2022, meanwhile selling weekly covered calls
Running Total 2 Trades since March 14, 2022
Options income: $20