Sold Credit Spread on LI – 3.3 % potential income return in 21 days

On February 12, 2021, we sold a bull put credit spread on LI stock with an expiry set in the next 21 days. For this trade, we get a premium of $104 (before commissions)

These trades come as the #31 and #32 in the month of February, according to our trading plan for this month, the premium generated from this trade makes us about 3.3% from our $3,000 monthly goal.  .While in total we have reached already 75.86% 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 MAR 05 '21 - 30 + 27 Put Bull Spread  -1.04USD 

For this trade, we got a premium of 99.2 USD (after commissions) or 3.3% potential income return in 21 days.

What happens next?

On the expiry date, March 5, 2021, LI is trading above $30 per share -  options expire worthlessly and we keep premium - if LI trades under $30 on the expiry date, we get assigned.

But as we already have collected a premium of $0.99 per share, our break-even price for this trade then is $30-$0.99 = $29.01

Selling credit spreads with LI stock
Selling credit spreads with LI stock

  • Running Total  15 Trades since January 19, 2021
  • Options income $582