Sold 1 Call Bear Spread on EWZ ETF – 1.48% potential income return in 66 days
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Sold 1 Call Bear Spread on EWZ ETF – 1.48% potential income return in 66 days
On January 11, 2022, I sold 1 call bear spread option on EWZ Brazil ETF with a strike price of $29 and $31 and expiry on March 18, 2022). I don't have actually 100 shares to deliver if challenged.
In case of danger, I will roll up and forward the short call option.
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 EWZ MAR 18 '22 29 Call Option 0.81 USD
BOT 1 EWZ MAR 18 '22 31 Call Option 0.33 USD
What happens next?
On the expiry date, March 18, 2022, EWZ is trading under $29 per share - options expire worthlessly and I keep premium - if EWZ trades above $29 I'm troubled as I need to deliver shares I don’t have, to avoid such scenario I will try to roll up the strike price.
Max loss: $157
Break-even price: $29+$0.43= $29.43