Roll Forward and Up 8 Covered Calls on SNDL - Potential income return -10.46% in 239 days

On June 2, 2021, we rolled forward and up 8 covered calls on SNDL stock expiring on October 15, 2021. For this trade, we got a $53 premium (after commissions).

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

here is our trade setup:

  • BOT 8 SNDL JUN 18 '21 1 Call Option 0.27 USD

  • SLD 8 SNDL OCT 15 '21 1.5 Call Option 0.39 USD

what can happen next:

SNDL is trading below our strike price of $1.5 at the expiry date (October 15, 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 $1.5, our 800 shares get called away at the strike price of $1.5 and we realize our max loss -$190 or -10.46% potential income loss in 239 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: $1.71