Sold Credit Spread on LI – 2.51% potential income return in 57 days

On March 25, 2021, we sold a bull put credit spread on LI stock with an expiry set in the next 57 days. For this trade, we get a premium of $55 (before commissions)

These trades come as the #168 and #169 in the month of March, according to our trading plan for this month, the premium generated from this trade makes us about 2.51% from our $2,000 monthly goal.  While in total we have reached already 297.97% so far. Awesome.

Li Auto Inc., also known as Li Xiang, is a Chinese electric vehicle manufacturer headquartered in Beijing, with manufacturing facilities in Changzhou.

I sold this income in the frames of dad's inheritance fund. All income from options will be used to purchase additional APPLE stock

Here is our trade setup:

  • BOT 1 LI MAY 21 '21 - 20 + 18 Put Bull Spread  -0.55 USD 

For this trade, we got a premium of 50.2 USD (after commissions) or 2.51% potential income return in 57 days.

What happens next?

On the expiry date, May 21, 2021, LI is trading above $20 per share -  options expire worthlessly and we keep premium - if LI trades under $20 on the expiry date, we get assigned.

But as we already have collected a premium of $0.50 per share, our break-even price for this trade then is $20-$0.5 = $19.5

Selling credit spreads with LI stock
Selling credit spreads with LI stock
  • Running Total  65 Trades since January 19, 2021
  • Options income $1,757