Roll Forward and Up 1 Covered Call on Virgin Galactic Holdings (NYSE:SPCE) - Potential income return 14.03% in 21 days

On April 30, 2021, we roll forwarded and up 1 call option on Virgin Galactic Holdings (NYSE:SPCE) with expiry on May 07. For this trade, we got a $74 premium (before commissions)

We have been in this trade since April 16, when we bought 107 shares of SPCE paying $23.14 per share

Virgin Galactic is an American spaceflight company within the Virgin Group. It is developing commercial spacecraft and aims to provide suborbital spaceflights to space tourists. Virgin Galactic's suborbital spacecrafts are air launched from beneath a carrier airplane known as White Knight Two.

As our strike price of $24 was not touched, we decided to roll up the strike price and roll forward for one week.

Here is our trade setup:

  • SLD 1 SPCE May 07 '21 24.5 Call Option 0.74 USD

what can happen next:

SPCE is trading below our strike price of $24.5  at the expiry date (May 07, 2021), in this case, we keep the premium and sell more covered calls to lower our cost basis. 

In case SPCE is trading above our strike price of $24.5, our 100 shares get called away at the strike price of $24.5 and we realize our max gain $342.8 or 14.03% potential return of income in 21 days. 

Break-even: $21.25