Sold 1 Credit Spread on TSLA – 0.051% potential income return in 2 days (9.3% annualized)

On March 11, 2021, we sold 1 bull put credit spread on TSLA stock with an expiry set in the next 2 days. For this trade, we get a premium of $37 (before commissions)

These trades come as the #83 and #84 in the month of March, according to our trading plan for this month, the premium generated from this trade makes us about 1.61% from our $2,000 monthly goal.  While in total we have reached already 156.38% so far. Awesome.

Here is our trade setup:

  • BOT 1 TSLA MAR 12 '21 - 620+ 610 Put Bull Spread  -0.37 USD 

For this trade, we got a premium of 45.6 USD (after commissions) or a 1.38% potential income return in 8 days.

What happens next?

On expiry date March 12, 2021, TSLA is trading above $620 per share -  options expire worthlessly and we keep premium - if TSLA trades under $620 on the expiry date, we are troubled as is would mean we have to buy 100 shares of TSLA at $620 per share (Total $62,000), as we actually don't have much money (neither cash nor in buying power) we will try to roll forward and down for credit, to avoid an assignment

As we already have collected a premium of $0.32 per share, our break-even price for this trade then is $620-$0.32 = $619.68

Selling credit spreads on TSLA stock
Selling credit spreads on TSLA stock
  • Running Total  2 Trades since March 11, 2021
  • Options income $32

Our goal is to collect enough premium and buy TSLA share (s), once we have enough money to pay for at least 1 share. If we would manage to take ~$30 weekly (by selling deep out of the money spreads),we would need about 23 weeks to have enough cash to purchase just one TSLA share. Now, this is fun.