Roll Forward and down 8 Covered Calls on SNDL - Potential income return -43.08% in 130 days

On May 4, 2021, we rolled forward and down 8 covered calls on SNDL stock expiring on June 18, 2021. For this trade, we got a $80 premium (before commissions).

We originally entered this trade as a put ratio back spread, in February. Our average buy price USD 2.27

As SNDL stock is now trading under a dollar, we are troubled a lot, but I decided to give it a little time and see maybe this stock can recover.

here is a quick video I made for my YouTube channel about SNDL stock

anyhow here is our trade setup:

  • SLD 8 SNDL JUN 18 '21 1 Call Option 0.1 USD

what can happen next:

SNDL is trading below our strike price of $1 at the expiry date (June 18, 2021), in such case, we keep the premium and sell more covered calls to lower our cost basis. 

In case SNDL is trading above our strike price of $1, our 800 shares get called away at the strike price of $1 and we realize our max loss -$648 or-43.08% potential income loss in 130 days

In case our strike price will get challenged I will try to roll up and for credit with further expiry in the future

Break-even: $1.81