Roll forward and down 4 Credit Spreads on SOLO - Potential income return -3.68% in 113 days

On March 25, 2021, we bought back 4 bull put credit spread options on SOLO 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 is a negative $73.5 (after commissions). This is something we are ready to take.

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 #166 and #167 in the month of March, according to our trading plan for this month, the premium generated from this trade makes us about 18.04% from our $2,000 monthly goal.  While in total we have reached already 295.46% so far. Awesome.

Here is our trade setup:

  •  SLD    4    SOLO    APR 16 '21 - 6 + 4 Put Bull Spread    -2.10 
  • BOT    4    SOLO    MAY 21 '21 - 5 + 3 Put Bull Spread    -0.95

In the aftermath of this trade, we got a total premium of -$73.6(after commissions) or -3.68 % potential income return in 113 days (if options expire worthlessly).In other words, we bought some time and lowered our strike price from $6 to $5, thus saving $400 if assigned now

What happens next?

On expiry date May 21, 2021, SOLO is trading above $5 per share -  options expire worthlessly and we keep premium - if SOLO trades under $5 on the expiry date, we get assigned.

As we already have collected a premium of -$0.19 per share, our break-even price for this trade then is $5+$0.19 = $5.19

Selling credit spreads with SOLO stock
Selling credit spreads with SOLO stock
  • Running Total  52 Trades since November 23, 2020

  • Options income: $3,813