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Trade Alert: Rolled-forward and up PFE Covered Call - 0.69% potential income in 99 days
On November 23, 2021, I rolled up and forward 1 call option on PFE stock
Originally I entered this trade back in October, see: Sold 1 Call Option on PFE – 0.08% potential income return in 4 days
I decided to roll up this call option because it was in the money, and I don’t actually have 100 shares to deliver (I have just 29)
Pfizer Inc. is an American multinational pharmaceutical and biotechnology corporation headquartered on 42nd Street in Manhattan, New York City. The company was established in 1849 in New York by two German immigrants, Charles Pfizer and his cousin Charles F. Erhart
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 PFE DEC 10 '21 45 Call Option 5.82 USD
SLD 1 PFE JAN 21 '22 46 Call Option 5.42 USD
Here I bought back the $45 call option paying $582 and sold a new call option with a higher strike price but with expiry in January. For this trade, I got $542 (before commissions).
What happens next?
On the expiry date, January 21, 2021, PFE is trading under $46 per share - options expire worthlessly and I keep premium - if PFE trades above $46 I'm troubled as I need to deliver shares I don’t have (I have just 29), to avoid such scenario I will try to roll up strike prices
Break-even price: $46+$0.32= $46.32