I’ve been thinking through a longer-term income + upside strategy and wanted to get this sub’s take before I put real money behind it.
The trade I’m considering:
- Buy 1,000 shares of Bloom Energy (BE) at ~$250/share * Total cost: ~$250,000 * Sell 10 covered call contracts (fully covered) * Expiration: June 2028 * Strike: $480 * Premium: ~$100 per share ($10,000 per contract / $100,000 total)
What this looks like mechanically:
- I collect $100,000 upfront in premium * That effectively lowers my net cost basis from: * $250 → $150 per share
If BE is above $480 by June 2028:
- Shares get called away at $480 * Profit per share: * $480 - $250 = $230 stock gain * $100 premium * = $330 total gain per share * Total max profit: * $330,000 on $250,000 capital (~132%)