Rolled Forward and Up 1 Covered Call on Tilray stock (NASDAQ:TLRY) - Potential income return +1.45% in 35 days

On May 28, 2021, we rolled forward and up 1 covered call on TLRY stock expiring on June 25, 2021. For this trade, we got $5 premium (after commissions)

We have been in this trade since May 21

Our average buy price $17.18

here is our trade setup:

  • BOT 1 TLRY MAY 28 '21 16 Call Option

  • SLD 1 TLRY JUN 25 '21 17 Call Option 2.43 USD

As TLRY stock price climbed above our strike price $16, we decided to roll forward for a credit assignment + sell protective put to offset losses and try to recover from this losing trade with covered calls

what can happen next:

TLRY is trading below our strike price of $17 at the expiry date (June 25, 2021), in this case, we keep the premium and sell more covered calls to lower our cost basis. 

In case the TLRY stock is trading above our strike price of $17, our 100 shares get called away at the strike price of $17, and we realize our max gain +$25 or 1.45% potential return of income in 35 days

Break-even: $16.75