Sold 1 Credit Spreads on RBLX – 0.49% potential income return in 15 days

On April 1, 2021, we sold 1 bull put credit spread on RBLX stock with an expiry set in the next 15 days. For this trade, we got a $36 premium (before commissions)

These trades come as the #9 and #10 in the month of March, according to our trading plan for this month, the premium generated from this trade makes us about 1.11% from our $2,800 monthly goal.  While in total we have reached already 6.17% this month so far. Awesome.

Roblox Corporation is an American video game developer based in San Mateo, California. Founded in 2004 by David Baszucki and Erik Cassel, the company is the developer of Roblox, which was released in 2006. As of December 2020, Roblox Corporation employs more than 830 people

Here is our trade setup:

  • BOT 1 RBLX APR 16 '21 - 63+ 61 Put Bull Spread  -0.36  USD  

For this trade, we got a premium of 31.20 USD (after commissions) or 0.5% potential income return in 15 days (if options expire worthlessly)

What happens next?

On the expiry date (April 16, 2021) RBLX is trading above $63 per share -  options expire worthlessly and we keep premium, realizing our max potential from this trade. If RBLX trades under $63 on the expiry date, we get assigned.

But as we already have collected a premium of $0.31 per share, our break-even price for this trade then is $63-$0.31= $62.69

As we are selling credit spreads, our max risk is defined, in case the stock will drop below $61, our second bought put will work as insurance and will minimize our potential losses.