Buy 1 400 call
Sell 2 420 call
Buy 1 440 call.
- As long as Tsla stay under 420, you are extending the cc to 420 - (whatever premium you paid for the above)
- If Telsa goes above 420 but below 440, you are extending cc to 420 - (stock price - 420)
- If Tesla goes above 440, then you are back to strike price of 400
Since you also have orignal premium when you sell 400 strike, you want to add this premium to the above P/L equation.