Rolling forward covered call on F stock - Potential income loss -15.25% in 221 days
On December 15, 2023, I rolled forward covered call on F stock.
At the start of November, I got assigned 100 shares with F stock at 14. A position I originally started back in July 2023.
In the previous weeks I have been trying to recover my loss by selling short strangles.
I rolled forward because my current strike price 11 was in the money, I decided to stick with the same strike price, as I rolling up might ask to roll far away in the future.
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This is not trading advice. Investments in stocks, funds, bonds, or cryptos are risk investments and you could lose some or all of your money. Do your due diligence before investing in any kind of asset.
here is the trade setup:
BOT 1 F Dec29'23 11 CALL 1.12 USD
SLD 1 F Feb16'24 11 CALL 1.33 USD
What happens next?
On the expiry date, February 16, 2024, F is trading under $11 - options expire worthlessly and I keep premium.
In case F trades above $11, I risk my 100 shares getting called away and book an actual loss of $168.
As I already have collected a premium of $1.32 per share, my break-even price for this trade is $14-$1.32= $12.68.
In total: 15 trades since July 10, 2023
Options premium: $132