Sold 3 Credit Spreads on FCEL – 5.10% potential income return in 27 days

On March 05, 2021, we sold 3 bull put credit spreads on FCEL stock with an expiry set in the next 27 days. For this trade, we got a $183 premium (before commissions)

These trades come as the #50 and #51 in the month of March, according to our trading plan for this month, the premium generated from this trade makes us about 8.43% from our $2,000 monthly goal.  While in total we have reached already 59.35% 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 APT 01 '21 - 11+ 9 Put Bull Spread  -0.61  USD  

For this trade, we got a premium of 168.8 USD (after commissions) or 5.10% potential income return in 27 days (if options expire worthlessly)

What happens next?

On the expiry date (April 01, 2021) FCEL is trading above $11 per share -  options expire worthlessly and we keep premium, realizing our max potential from this trade. If FCEL trades under $11 on the expiry date, we get assigned.

But as we already have collected a premium of $0.56 per share, our break-even price for this trade then is $11-$0.56= $10.44

As we are selling credit spreads, our max risk is defined, in case the stock will drop below $9, 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  12 Trades since September 2, 2020

  • Options income: $593