Sold 2 Credit Spreads on AAL – 2.01 % potential income return in 37 days

On January 6, 2021, we sold 2 bull put credit spreads on AAL stock with an expiry set in the next 37 days. For this trade, we get a premium of $70 (before commissions)

These trades come as the #2 and #3 in the month of January, according to our trading plan for this month, the premium generated from this trade makes us about 2.41% from our $2,500 monthly goal.  While in total we have reached already 6.46% so far. Awesome.

AAL - American Airlines Group Inc. is an American publicly traded airline holding company headquartered in Fort Worth, Texas. It was formed on December 9, 2013, by the merger of AMR Corporation, the parent company of American Airlines, and US Airways Group, the parent company of US Airways.

Here is our trade setup:

  • BOT 2 AAL FEB 12 '21 - 15 + 14 Put Bull Spread  -0.35 USD 

For this trade, we got a premium of 60.6 USD (after commissions) or 2.01% potential income return in 37 days.

What happens next?

On expiry date February 12, 2021 AAL is trading above $15 per share -  options expire worthlessly and we keep premium - if AAL trades under $15 on the expiry date, we get assigned.

But as we already have collected a premium of $0.30 per share, our break-even price for this trade then is $15-$0.3 = $14.7

Selling credit spreads with AAL stock
Selling credit spreads with AAL stock
  • Running Total  14 Trades since July 10, 2020
  • Options income: $189