Call Bear Spread on GOOG with Potential 3.1% Return in 8 days

On May 18, 2023, I sold 1 call bear spread on GOOG stock with strike prices at $130 and $135 with expiry on May 26, 2023.

For this five-dollar-wide credit spread, I was rewarded with $15.50 (after commissions).

About 3.1% potential return in 8 days, if options expire worthless.

Short delta 0.08, or about 92% probability that the trade will expire worthless.

A call bear spread is an options trading strategy that involves selling a call option with a higher strike price and simultaneously buying a call option with a lower strike price on the same underlying asset. In this case, I sold a call option with a strike price of $130 and bought a call option with a strike price of $135.

This is not trading advice. Investments in stocks, funds, bonds, or cryptos are risk investments and you could lose some or all of your money. Do your due diligence before investing in any kind of asset

here is the trade setup:

• SLD 1 GOOG MAY 26 '23 130 Call Option 0.28 USD

• BOT 1 GOOG MAY 26 '23 135 Call Option 0.10 USD

What happens next?

On the expiry date, May 26, 2023, GOOG is trading under $130 per share -  options expire worthless and I keep premium - if GOOG trades above $130 I'm troubled as I need to deliver shares I don’t have. To avoid such a scenario I will try to roll up the strike price.

The Max risk is $500 to earn $15.5

Max loss: $44.5

Break-even price: $130+$0.15= $130.15

• In total: 4 trades since May 8, 2023

• Options premium: $34