On April 6, 2021, we bought back 5 bull put credit spread options on VXRT stock and additionally sold 5 new bull put credit spreads with expiry further out (roll forward). The aftermath of this trade $285.6 (after commissions)
Originally we opened this trade on February 03: Sold 3 Credit Spreads on VXRT – 11.09% potential income return in 44 days, but as our strike price got challenged on March 12, we roled forward, down and double up (increased contract size), see: Roll forward, down and double up 5 Credit Spreads on VXRT – 8.57% potential income return in 58 days
Now, again with our strike prices in the money, we decided to roll forward for some small credit.
These trades come as the #16 and #17 in the month of April, according to our trading plan for this month, the premium generated from this trade makes us about 11.64% from our $2,800 monthly goal. While in total we have reached already 21.53% this month so far. Awesome.
Here is our trade setup:
- SLD 5 VXRT APR 09 '21 - 6.5 + 5 Put Bull Spread -0.594 USD
- BOT 5 VXRT MAY 14 '21 - 6.5 + 5 Put Bull Spread -0.716 USD
The aftermath for this trade since inception in February total premium of $285,6 (after commissions) or 8.78% potential income return in 93 days (if options expire worthlessly).In other words, we bought some additonal time
What happens next?
On expiry date May 14, 2021 VXRT is trading above $6.5 per share - options expire worthlessly and we keep premium - if VXRT trades under $6.5 on the expiry date, we get assigned.
But as we already have collected a premium of $0.57 per share, our break-even price for this trade then is $6.5-$0.57 = $5.93
Running Total 24 trades since September 15, 2020
Options Income: $1,144