Sold 1 Covered Call on Virgin Galactic Holdings (NYSE:SPCE) - Potential income return 6.26% in 3 days

On May 11, 2021, we bought 100 shares with Virgin Galactic Holdings (NYSE:SPCE) and simultaneously sold 1 covered call (buy/write) on it which expires on May 14, 2021 (weekly options). For this trade, we got a $77 premium (before commissions)

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.

Here is our trade setup:

  • BOT 100 SPCE Stock 16.7 USD 

  • SLD 1 SPCE MAY 14 '21 17 Call Option 0.77 USD

what can happen next:

SPCE is trading below our strike price of $17  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 $17, our 100 shares get called away at the strike price of $17 and we realize our max gain $104.3 or 6.26% potential return of income in 3 days. 

Break-even: $15.96