Sold Put Bull Ratio Back Spreads on SNDL – 11.12 % potential income return in 8 days

On February 11, 2021, we sold an 8 ratio back spreads on SNDL  stock expiring on February 19, 2021. For this trade, we got a $222.40 premium (after commissions)

These trades come as the #28 and #29 in the month of February, according to our trading plan for this month, the premium generated from this trade makes us about 7.41% from our $3,000 monthly goal.  .While in total we have reached already 71.74% so far. Awesome.

We decided to sell ratio back spreads to have some protection in the future, as currently, we are already holding 400 shares with SNDL, and in case SNDL stock will continue to fall, we are hoping both to protect current positions, both earn some additional income

Here is our trade setup:

  • BOT  1  SNDL  FEB 19 '21 - (8) 2.5 + (16) 1.5 Put Combo  -0.36

For this trade, we got a premium of 222.40 USD (after commissions) or 11.12% potential income return in 8 days.

What happens next?

On expiry date February 19, 2021, SNDL is trading above $2.5 per share -  options expire worthlessly and we keep premium - if SNDL trades under $2.5 on the expiry date, we get assigned.

But as we already have collected a premium of $0.27 per share, our break-even price for this trade then is $2.5-$0.27 = $2.23

In case SNDL will drop below our second bought strike prices at $1.5, we will earn additional income

/selling ratio put spreads with SNDL stock
/selling ratio put spreads with SNDL stock
  • Running Total  4 Trades since February 9, 2021
  • Options income $285