Roll forward and down 4 Credit Spreads on FCEL - Potential income return 3.78% in 56 days

On March 25, 2021, we bought back 3 bull put credit spread options on FCEL stock and additionally sold 4 new bull put credit spreads with lower strikes prices and expiry further out (roll forward and down). The aftermath of this trade $159 (after commissions)

Originally we opened this trade on March 05: Sold 3 Credit Spreads on FCEL – 5.10% potential income return in 27 days as our strike prices we challenged we decided to roll forward and down.

These trades come as the #170 and #171 in the month of March, according to our trading plan for this month, the premium generated from this trade makes us about 6.24% from our $2,000 monthly goal.  While in total we have reached already 280.75% so far. Awesome.

Here is our trade setup:

  • SLD    3    FCEL    APR 01 '21 - 11 + 9 Put Bull Spread    -0.47    USD   
  • BOT    4    FCEL    APR 30 '21 - 10.5 + 9 Put Bull Spread    -0.36    USD

The aftermath for this trade, we got a total premium of $159 (after commissions) or 3.78 % potential income return in 56 days (if options expire worthlessly).In other words, we bought some time and lowered our strike price from $11 to $10.5

What happens next?

On expiry date April 30, 2021 FCEL is trading above $10.5 per share -  options expire worthlessly and we keep premium - if FCEL trades under $10.5 on the expiry date, we get assigned.

But as we already have collected a premium of $0.39 per share, our break-even price for this trade then is $10.5-$0.39 = $10.11

Selling credit spreads with FCEL stock
Selling credit spreads with FCEL stock
  • Running Total  19 Trades since September 2, 2020

  • Options income: $658