Sold 1 Naked Call Option on SDC +2.4% potential income in 2 days

On October 06, 2021, I sold 1 naked call option on SDC stock expiring this Friday.

By saying naked call, I mean I don’t have underlying shares to deliver in case I will get assigned. Selling naked calls can be dangerous.

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.

This trade comes as the #77 in the month of October, according to my trading plan for this month, the premium generated from this trade makes me about 2.93% of my $600 monthly goal.  While in total I have reached already 9.06% so far. Awesome!

With SDC stock spiking more than 10% today, seems the short squeeze is back.

Here is the trade setup:

  • SLD 1 SDC OCT 08 '21 7.5 Call Option 0.20 USD

For this call option, I got a credit of 17.6 USD (after commissions) or a 2.4% potential income return in 2 days, if options expire worthlessly

What happens next?

On the expiry date, October 08, 2021, SDC is trading below $7.5 per share -  options expire worthlessly and I keep premium - if VIAC trades above $7.5 on the expiry date, I will be troubled as I will need to deliver 100 shares (which I don’t have, and will be obliged to buy them at the open market for the market price)

Break-even price: $7.5+0.17 = $7.67

In case my strike price of $7.5 will get challenged I will try to roll up and forward to next week's expiry.