Sold 2 Credit Spreads on FUV – 3.48% potential return in 35 days

On March 12, 2021, we sold 3 bull put credit spreads on FUV stock with an expiry set in the next 35 days. For this trade we got a premium of $106 (before commissions)

These trades come as the #98 and #99 in the month of March, according to our trading plan for this month, the premium generated from this trade makes us about 5.22% from our $2,000 monthly goal.  While in total we have reached already 205.22% so far. Awesome.

Arcimoto is an electric vehicle company headquartered in Eugene, Oregon that manufactures and sells the Fun Utility Vehicle, or FUV, a tandem two-seat, three-wheeled electric vehicle. They also sell van-variations on the design "Rapid Responder" for emergency services, and "Deliverator" for last-mile deliveries.

Here is our trade setup:

  • BOT 2  FUV  APR 16 '21 - 15+ 12.5 Put Bull Spread -0.53 USD 

For this trade, we got a premium of 104.40 USD (after commissions) or a 3.48% potential income return in 35 days, if options expire worthless.

What happens next?

On the expiry date (April 16, 2021) FUV is trading above $15 per share -  options expire worthlessly and we keep premium, realizing our max potential from this trade. If FUV trades under $15 on the expiry date, we get assigned.

But as we already have collected a premium of $0.52 per share, our break-even price for this trade then is $15-$0.52= $14.48

As we are selling credit spreads, our max risk is defined, in case the stock will drop below $12.5, our second bought put will work as insurance and will minimize our potential losses.

In case of assignment, we are ready to spend $3,000 to buy 200 shares with FUV stock

Selling credti spreads with FUV stock
Selling credti spreads with FUV stock
  • Running Total  6 Trades since December 9, 2020

  • Options income: $275