Rolling forward and down 1 Covered Call on Virgin Galactic Holdings (NYSE:SPCE) - Potential income return 10% in 21 days

On May 6 2021, we rolled forward and down 1 call option on Virgin Galactic Holdings stock (NYSE: SPCE) with an expiry set on May 14. For this trade, we got a $32 premium (before commissions)

We have been in this trade since April 23, when we bought 105 shares of SPCE paying $22.22 per share, see: Sold 1 Covered Call on Virgin Galactic Holdings (NYSE:SPCE) - Potential income return 4.57% in 7 days

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 spacecraft are air launched from beneath a carrier airplane known as White Knight Two.

Here is our trade setup:

  • SLD 1 SPCE MAY 14 '21 22.5 Call Option 0.32 USD

what can happen next:

SPCE is trading below our strike price of $22.5  at the expiry date (May 14, 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 $22.5, our 100 shares get called away at the strike price of $22.5 and we realize our max gain $222.2 or 10% potential return of income in 21 days. 

Break-even: $20.29