Sold 3 Credit Spreads on FCEL – 3.49% potential income return in 35 days

On March 19, 2021, we sold 3 bull put credit spreads on FCEL stock with an expiry set in the next 35 days. For this trade, we got a $135 premium (before commissions)

These trades come as the #136 and #137 in the month of March, according to our trading plan for this month, the premium generated from this trade makes us about 6.03% from our $2,000 monthly goal.  While in total we have reached already 276.41% 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 3 FCEL APR 01 '23 - 11.5+ 9.5 Put Bull Spread  -0.45  USD  

For this trade, we got a premium of 120.60 USD (after commissions) or 3.49% potential income return in 35 days (if options expire worthlessly)

What happens next?

On the expiry date (April 23, 2021) FCEL is trading above $11.5 per share -  options expire worthlessly and we keep premium, realizing our max potential from this trade. If FCEL trades under $11.5 on the expiry date, we get assigned.

But as we already have collected a premium of $0.40 per share, our break-even price for this trade then is $11.5-$0.40= $11.10

As we are selling credit spreads, our max risk is defined, in case the stock will drop below $9.5, 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  15 Trades since September 2, 2020

  • Options income: $689