Roll Forward and Down 3 Credit Spreads on TLRY – 0.68% potential income return in 64 days

On April 7, 2021, we bought back 3 bull put credit spreads on TLRY stock, and additionally sold 3 new bull put credit spreads with lower strikes prices and expiry further out (roll forward and down). The aftermath of this trade $40.8 (after commissions)

Originally we opened this trade on March 18: Sold 3 Credit Spreads on TLRY – 2.81% potential income return in 23 days, but as our strike price $22 got challenged we decided to roll forward and down, unfortunetly giving up some credit.

These trades come as the #20 and #21 in the month of April, according to our trading plan for this month, the premium generated from this trade makes us about 10.2% from our $2,800 monthly goal.  While in total we have reached already 34.21% this month so far. Awesome.

Here is our trade setup:

  • SLD    3    TLRY    APR 09 '21 - 22 + 20 Put Bull Spread    -1.33    
  • BOT    3    TLRY    MAY 21 '21 - 20 + 18 Put Bull Spread    -1.027    

The aftermath for this $40.8 (after commissions) or 0.68% potential income return in 64 days (if options expire worthlessly). In other words, we bought some additonal time and lowered our strike price from $22 to $20

What happens next?

On expiry date May 21, 2021 TLRY is trading above $20 per share -  options expire worthlessly and we keep premium - if TLRY trades under $20 on the expiry date, we get assigned.

But as we already have collected a premium of $0.13 per share, our break-even price for this trade then is $20-$0.13 = $19.87