Roll forward, down and double up 2 Credit Spreads on AMWL – 1.32% potential income return in 38 days

On March 17, 2021, we bought back 1 bull put credit spread options on AMWL stock and additionally sold 2 new bull put credit spreads with lower strikes prices and expiry further out (roll forward, down and double up). The aftermath of this trade $52.8 (after commissions)

Originally we opened this trade on March 09: Sold Credit Spread on AMWL – 2.36% potential income return in 10 days, as our strike prices we challenged we decided to roll forward and down.

These trades come as the #109 and #110 in the month of March, according to our trading plan for this month, the premium generated from this trade makes us about 9.02% from our $2,000 monthly goal.  While in total we have reached already 223.40% so far. Awesome.

Here is our trade setup:

  • SLD    1    AMWL    MAR 19 '21 - 22.5 + 20 Put Bull Spread    -1.80    USD    
  • BOT    2    AMWL    APR 16 '21 - 20 + 17.5 Put Bull Spread    -0.95    USD 

The aftermath for this trade, we got a total premium of $52.8 (after commissions) or 1.32% potential income return in 38 days (if options expire worthlessly).In other words, we bought some time and lowered our strike price from $22.5 to $20

What happens next?

On expiry date April 16, 2021 AMWL is trading above $20 per share -  options expire worthlessly and we keep premium - if AMWL trades under $20 on the expiry date, we get assigned.

But as we already have collected a premium of $0.26 per share, our break-even price for this trade then is $20-$0.26 = $19.74

Selling credit spreads with AMWL stock
Selling credit spreads with AMWL stock
  • Running Total  11 Trades since November 19, 2020
  • Options income $162