Sold 6 Credit Spreads on BCRX – 8.3% potential return in 28 days (108.14% annualized)

On November 20, 2020, we sold 6 bull put credit spreads on BCRX stock with an expiry set in the next 28 days. For this trade, we got a $228 premium (before commissions)

BioCryst Pharmaceuticals, Inc. is an American pharmaceutical company headquartered in Durham, North Carolina. The company is a late stage biotech company that focuses on oral drugs for rare and serious diseases. 

These trades come as the #23 and #24 in the month of November, according to our trading plan for this month, the premium generated from this trade makes us about 44.26% from our $450 monthly goal, while in total we have already reached 139.93% so far. Awesome

We have been selling naked puts, credit spreads and covered calls on BCRX stocks with great success since April 2020

Here is our trade setup:

BOT 6 BCRX DEC 18 '20 - 4 + 3 Put Bull Spread -0.38 USD

For this trade, we got a premium of 199.2 USD (after commissions) or an 8.3% potential income return in 28 days.

What happens next?

On the expiry date (December 18, 2020) BCRX is trading above $4 per share -  options expire worthlessly and we keep premium, realizing our max potential from this trade. If BCRX trades under $4 on the expiry date, we get assigned.

But as we already have collected a premium of $0.33 per share, our break-even price for this trade then is $4-$0.33= $3.67

As we are selling credit spreads, our max risk is defined, in case the stock will drop below $3, our second bought put will work as insurance and will minimize our potential losses.

Selling credit spreads with BCRX stock
Selling credit spreads with BCRX stock
  • Running Total 24 Trades since April 30, 2020

  • Options income: $978