Sold 2 Credit Spreads on NKLA – 6.12 % potential income return in 23 days

On December 1, 2020, we sold 2 bull put credit spreads on NKLA stock with an expiry set in the next 23 days. For this trade, we get a premium of $132 (before commissions)

These trades come as the #1 and #2 in the month of December, according to our trading plan for this month, the premium generated from this trade makes us about 11.12% from our $1,100 monthly goal.

Nikola Corporation is an American company that has presented a number of zero-emission vehicle concepts since 2016. The company intends on producing some of its concept vehicles in the future. Nikola Corporation is based in Phoenix, Arizona. The company is named after Nikola Tesla but is not related to the inventor.

Here is our trade setup:

  • BOT 2 ATEC DEC 23 '20 - 10 + 5 Put Bull Spread  -0.66 USD 

For this trade, we got a premium of 122.4 USD (after commissions) or 6.12% potential income return in 23 days.

 

What happens next?

On expiry date December 24, 2020 NKLA is trading above $10 per share -  options expire worthlessly and we keep premium - if NKLA trades under $10 on the expiry date, we get assigned.

But as we already have collected a premium of $0.61 per share, our break-even price for this trade then is $10-0.61 = $9.39

Selling Credit Spreads with NKLA stock
Selling Credit Spreads with NKLA stock
  • Running Total  2 Trades since December 1, 2020
  • Options income $122