On November 25, 2020, we sold a bull put credit spread on GPS stock with expiry in the next 9 days.
Here is our trade setup:
- BOT 1 GPS DEC 04 '20 - 20.5 + 19.5 Put Bull Spread -0.23 USD
For this trade, we got a premium of 18.20 USD (after commissions) or a 0.88% potential income return in 9 days.
These trades come as the #38 and #39 in the month of November, according to our trading plan for this month, the premium generated from this trade makes us about 4.04% from our $450 monthly goal, while in total we have already reached 254% so far.
So what happens next?
On expiry date (December 4, 2020) GPS is trading above $20.5 per share - options expire worthlessly and we keep premium - if GPS trades under $20.5 on the expiry date, we get assigned.
But as we already have collected a premium of 0.18 per share, our break-even price for this trade then is $20.5-$0.18 = $20.32
- Running Total 17 Trades since May 1, 2020
- Options income: $227