Roll Forward and up 1 Covered Call on VTRS - Potential income return -3.2% in 315 days

On May 10, 2021, we roll forwarded 1 covered call on VTRS stock expiring on December 17, 2021. For this trade, we got $17 (after commissions)

As we have been buying VTRS using dollar-cost averaging  our average buy price is: $16.48

With our strike price of $14 challenged we decided to roll far forward (December expiry) and roll up our strike price by one dollar ($1)

here is our trade setup:

  • BOt 1 VTRS May 14 '21 14 Call Option 1.35 USD

  • SLD 1 VTRS Dec 17 '21 15 Call Option 1.57 USD

what can happen next:

VTRS is trading below our strike price of $15 at the expiry date (December 17, 2021), in such case, we keep the premium and sell more covered calls to lower our cost basis. 

In case VTRS is trading above our strike price of $15, our 100 shares get called away at the strike price of $15 and we realize our max gain negative - $53.8 or -3.2% potential total income loss in 315 days

Break-even: $15.58