Rolling forward and up 1 Covered Call on Virgin Galactic Holdings (NYSE:SPCE) - Potential income return 10.91% in 14 days

On April 30, 2021, we rolled forward and up 1 call option on Virgin Galactic Holdings stock (NYSE:SPCE) with expiry on May 07. For this trade, we got a $91 premium (after 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 spacecrafts are air launched from beneath a carrier airplane known as White Knight Two.

AS at one moment it looked that our strike price could get touched and not willing to take this risk, we bought back our existing $22.5 strike and sold a new one with a higher price

Here is our trade setup:

  • BOT 1 SPCE APR 30 '21 22.5 Call Option 0.16 USD

  • SLD 1 SPCE MAY 07 '21 23 Call Option 1.12 USD

what can happen next:

SPCE is trading below our strike price of $23  at the expiry date (May 07, 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 $23, our 100 shares get called away at the strike price of $23 and we realize our max gain $242.6 or 10.91% potential return of income in 14 days. 

Break-even: $20.58