Sold 4 Credit Spreads on SDC – 2.29% potential income return in 22 days

On January 7, 2021, we sold 4 bull put credit spreads on NASDAQ:SDC stock with an expiry set in the next 22 days. For this trade, we get a premium of $120 (before commissions)

These trades come as the #4 and #5 in the month of January, according to our trading plan for this month, the premium generated from this trade makes us about 4.03% from our $2,500 monthly goal.  While in total we have reached already 10.49% so far. Awesome.

Here is our trade setup:

  • BOT 4 SDC JAN 29 '21 - 11+ 10 Put Bull Spread  -0.30 USD 

For this trade, we got a premium of 100.80 USD (after commissions) or a 2.29% potential income return in 22 days.

What happens next?

On expiry date January 29, 2021, SDC is trading above $11 per share -  options expire worthlessly and we keep premium - if SDC trades under 11 on the expiry date, we get assigned.

But as we already have collected a premium of $0.25 per share, our break-even price for this trade then is $11-$0.25 = $10.75

Selling credit spreads with SDC stock
Selling credit spreads with SDC stock
  • Running Total  52 Trades since April 27, 2020
  • Options income $1,293