On August 10, 2020, we sold a bull put credit spread on M stock with an expiry set in the next 18 days.
M stands for Macy's, Inc. is an American holding company founded by Xavier Warren in 1929. Upon its establishment, Federated held ownership of the regional department store chains Abraham & Straus, Lazarus, Filene's, and Shillito's.
Here is our trade setup:
- BOT 1 M AUG 28 '20 - 6.5 + 5.5 Put Bull Spread -0.25 USD
For this trade, we got a premium of 20.6 USD (after commissions) or a 3.1% potential income return in 18 days. That's more than a dollar per day!
These trades come as the #18 and #19 in the month of August, and if we stick with our trading plan for this month, the premium generated from this trade makes us about 2.69% from our $750 monthly goal, while in total we have already reached 40.93% from our monthly goal so far.
What happens next?
On expiry date (August 28, 2020) M is trading above $6.5 per share - options expire worthlessly and we keep premium - if M trades under $6.5 on the expiry date, we get assigned.
But as we already have collected a premium of 0.20 per share, our break-even price for this trade then is $6.5-$0.2 = $6.3
In other words, M can fall from the current price of $7.15 way down to $6.3 and we will still be break-even
As we are selling credit spread here, in case M suddenly drops bellow our second bought put at the strike price $5.5 it will help to mitigate risk, in other words - selling credit spreads has a lot of advantages.

- Running Total 2 Trades since August 10, 2020
- Options Income: $20