Sold 3 Credit Spreads on FSR – 4.51% potential income return in 29 days

On January 28, 2021, we sold 3 bull put credit spreads on FSR stock with an expiry set in the next 29 days. For this trade, we got a $201 premium (before commissions)

These trades come as the #46 and #47 in the month of January, according to our trading plan for this month, the premium generated from this trade makes us about 7.58% from our $2,500 monthly goal.  While in total we have reached already 127.36% so far. Awesome

Fisker Inc. is an American electric vehicle automaker founded by Henrik Fisker and his wife Geeta Gupta-Fisker. Launched in 2016 and based in Southern California, Fisker Inc. is the relaunch of the Fisker brand previously known as Fisker Automotive, which produced the Fisker Karma

Here is our trade setup:

  • BOT 3 FSR FEB 26 '21 - 14 + 12 Put Bull Spread  -0.67  USD  

For this trade, we got a premium of 189.60 USD (after commissions) or a 4.51% potential income return in 29 days (if options expire worthlessly)

What happens next?

On the expiry date (February 26, 2021) FSR is trading above $14 per share -  options expire worthlessly and we keep premium, realizing our max potential from this trade. If FSR trades under $14 on the expiry date, we get assigned.

But as we already have collected a premium of $0.63 per share, our break-even price for this trade then is $14-$0.63= $13.37

As we are selling credit spreads, our max risk is defined, in case the stock will drop below $12, our second bought put will work as insurance and will minimize our potential losses.

In case of assignment, we are ready to spend $4,200 to buy 300 shares with FSR stock

Selling Credit spreads with FSR stock
Selling Credit spreads with FSR stock
  • Running Total  2 Trades since January 28, 2021

  • Options income: $190