Roll Forward 1 Covered Call on Pfizer (NYSE:PFE) - Potential income return +0.31% in 177 days

On April 23, 2021, we roll forwarded 1 covered call on NYSE:PFE  stock expiring on May 14, 2021. For this trade, we got $16 (after commissions)

As we were buying PFE stock throughout the year 2020, our average buy price is: $37.87

On April 23 PFE was trading above $38 and we decided to roll forward for credit (by buying back our existing call option)

here is our trade setup:

  • BOT 1 PFE APR 30 '21 37.5 Call Option 1.23 USD

  • SLD 1 PFE MAY 14 '21 37.5 Call Option 1.44 USD

what can happen next:

PFE is trading below our strike price of $37.5 at the expiry date (May 15, 2021), in this case, we keep the premium and sell more covered calls to lower our cost basis. 

In case PFE is trading above our strike price of $37.5, our 100 shares get called away at the strike price of $37.5 and we realize a minor gain of +$11.8 or +0.33% total income return in 177 days

Break-even: $36.40