On February 24, 2021, we sold 2 bull put credit spreads on FCEL stock with an expiry set in the next 23 days. For this trade, we got a $84 premium (before commissions)
These trades come as the #48 and #49 in the month of February, according to our trading plan for this month, the premium generated from this trade makes us about 2.48% from our $3,000 monthly goal. .While in total we have reached already 134.08% so far. Awesome.
FCEL - FuelCell Energy, Inc. is a fuel cell power company. It designs, manufactures, operates and services Direct Fuel Cell power plants that run on natural gas and biogas. As the biggest publicly traded fuel-cell manufacturer in the U.S., the company operates over 50 plants all over the world
Here is our trade setup:
BOT 2 FCEL MAR 19 '21 - 13+ 11 Put Bull Spread -0.42 USD
For this trade, we got a premium of 74.4 USD (after commissions) or 2.86% potential income return in 23 days (if options expire worthlessly)
What happens next?
On the expiry date (March 19, 2021) FCEL is trading above $13 per share - options expire worthlessly and we keep premium, realizing our max potential from this trade. If FCEL trades under $13 on the expiry date, we get assigned.
But as we already have collected a premium of $0.37 per share, our break-even price for this trade then is $13-$0.37= $12.63
As we are selling credit spreads, our max risk is defined, in case the stock will drop below $11, our second bought put will work as insurance and will minimize our potential losses.
Running Total 10 Trades since September 2, 2020
Options income: $424