Rolled Forward UWMC Covered Call +6.86% potential income return in 49 days

On October 15, 2021, I rolled forward 1 covered call on UWMC stock, a position I originally established at the start of October by investing $682, see: Established New Covered Call on UWMC; Potential Income return 3.9% in 7 days

United Wholesale Mortgage (NYSE: UWMC) is the wholesale mortgage lender

As the stock reached my strike price of $7 on the expiry and not willing yet to let my shares get called away I decided to roll forward, unfortunately, I was not able to roll forward for a decent credit. I stick with the same strike price but expiry in next month

here is the trade setup:

  • BOT 1 UWMC OCT 15 '21 7 Call Option 0.17 USD

  • SLD 1 UWMC NOV 19 '21 7 Call Option 0.42 USD

here I bought back October 15 expiry call option paying $17 and sold a new call option with expiry on November 19, 2021, receiving $42 (before commissions)

What happens next?

On the expiry date, November 19, 2021, UWMC is trading under $7 per share -  options expire worthlessly and I keep premium - if UWMC trades above $7 on the expiry date, my 100 shares will get called away and I realize my max profit $46.8 or potential income return 6.86% yield in 49 days.

Break-even price: $6.82-$0.28= $6.54

I prefer selling options on stable dividend stocks, in that manner collecting both dividend and option premium. Let’s hope - UWMC is stable enough.