Credit Spread on Deutsche Lufthansa (FRA:LHA) – 1.69% Potential Income Return In 16 Days (38.55% annualized)

On November 4, 2020, we sold a bull put credit spread on FRA:LHA stock, set with expiry in the next 16 days (November 20, 2020). For this trade, we got a small EUR 13.42 premium (after commissions)

Deutsche Lufthansa AG, commonly known as Lufthansa, is the largest German airline which, when combined with its subsidiaries, is the second largest airline in Europe in terms of passengers carried.

These trades come as the #2 and #3 in the month of November, according to our trading plan for this month, the premium generated from this trade makes us about 2.98% from our $450 monthly goal, while in total we have already reached 4.0% so far.

Here is our trade setup:

  • BOT 1  FRA:LHA NOV 20 '20 - 7.9 + 7.4 Put Bull Spread  -0.15  EUR  

For this trade, we got a premium of 13.42 EUR (after commissions) or 1.69% potential income return in the next 16 days.

What happens next?

On the expiry date (November 20, 2020) FRA:LHA is trading above EUR 7.9 per share -  options expire worthlessly and we keep premium - if FRA:LHA trades under EUR 7.9 on the expiry date, we get assigned.

But as we already have collected a premium of EUR 0.13 per share, our break-even price for this trade then is EUR 7.9- EUR 0.13= EUR 7.77

Selling Credit Spreads with Lufthansa stock
Selling Credit Spreads with Lufthansa stock
  • Running Total  2 Trades since November 4, 2020

  • Options Income: EUR 13