Sold 2 Credit Spreads on FCEL – 2.86% potential income return in 23 days

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.

Selling credit spreads with FCEL stock
Selling credit spreads with FCEL stock
  • Running Total  10 Trades since September 2, 2020

  • Options income: $424