On April 30, 2020, I bought 110 shares of BCRX, paying $3.875 per share. BCRX is a small pharma doing a clinical study on galidesivir for treating the novel coronavirus disease (COVID-19).​

Found this name on Biotech Stocks Under $5. After a quick read on Yahoo Finance and options price research - I decided to sell covered call options on this stock. This is a bit of gambling, but as the money invested is not large, this is the gamble I'm ready to take

Here is the setup

  • BOT 100 BCRX Stock 3.875 USD
  • SLD 1 BCRX MAY 15 '20 4 Call Option 0.62 USD 

Potential income return 19.12% in 15 days
Break-even: $3.25

If the stock will trade above $4.00 on the expiry day - very well, I realize my max gain, 100 shares get called away. I keep 10 shares for a memory or seed for the future buys

If trades in between $3.25-$4.00 I keep selling covered calls

If trades below $3.25 - my max loss, in such scenario I will most probably double up to lower the cost basis and keep selling covered calls.

Selling covered calls with BCRX

Selling covered calls with BCRX

Subscribe to Trading newsletter

Join trading newsletter and get notified once the newest trading article is out.
* indicates required

You can unsubscribe at any time by clicking the link in the footer of our emails. For information about our privacy practices, please visit Privacy policy