Sold Credit Spread on RVP – 6.25% potential income return in 30 days

On March 17, 2021, we sold a bull put credit spread on LI stock with an expiry set in the next 30 days. For this trade, we get a premium of $83 (before commissions)

These trades come as the #114 and #115 in the month of March, according to our trading plan for this month, the premium generated from this trade makes us about 3.91% from our $2,000 monthly goal.  While in total we have reached already 232.26% so far. Awesome.

Retractable TechnologiesInc. designs, develops, manufactures and markets safety needle devices for the healthcare industry. The Company's VanishPoint® products utilize a patented friction ring mechanism. VanishPoint products are designed specifically to prevent needlestick injuries and to prevent reuse.

Here is our trade setup:

  • BOT 1 RVP APR 16 '21 - 12.5 + 10 Put Bull Spread  -0.83 USD 

For this trade, we got a premium of 78.2 USD (after commissions) or 6.25% potential income return in 10 days.

What happens next?

On the expiry date, April 16, 2021, RVP is trading above $12.5 per share -  options expire worthlessly and we keep premium - if RVP trades under $12.5 on the expiry date, we get assigned.

But as we already have collected a premium of $0.78 per share, our break-even price for this trade then is $12.5-$0.78 = $11.72

Selling credit spreads with RVP stock
Selling credit spreads with RVP stock
  • Running Total  2 Trades since March 17, 2021
  • Options income $78