New Covered Call on Li auto stock (NASDAQ:LI) - Potential income return +2.69% in 3 days

On June 29, 2021, I sold 1 covered call on Li auto stock expiring on July 02, 2021 (3DTE). For this trade, we got a, $71 premium (before commissions)

I sold this covered call just shortly after bought 100 shares at $33.80.

LI auto stock has been very volatile and speculative (premiums are great) during the last 6 months.

here is our trade setup:

  • BOT 120 LI Stock 33.805 USD

  • SLD 1 LI JUL 02 '21 34 Call Option 0.71 USD

what can happen next:

Li is trading below our strike price of $34 at the expiry date (Jul 02, 2021), in this case, we keep the premium and sell more covered calls to lower our cost basis. 

In case the LI stock is trading above our strike price of $34, our 100 shares get called away at the strike price of $34, and we realize our max gain +$91 or 2.69% potential return of income in 3 days

Break-even: $33.09