On September 1, 2021, I sold 1 bull put credit spread on EWZ ETF with an expiry set in the next 9 days. For this trade, I got a premium of $25.20 (after commissions)
EWZ - or the iShares MSCI Brazil ETF seeks to track the investment results of an index composed of Brazilian equities.
These trades come as the #1 and #2 in the month of September, according to my trading plan for this month, the premium generated from this trade makes me about 2.52% of my $1,000 monthly goal. While in total I have reached already 2.52% so far. Awesome.
Here is the trade setup:
BOT 1 EWZ SEP 10 '21 - 36 + 34 Put Bull Spread -0.30 USD
For this trade, I got a premium of 25.2 USD (after commissions) or a 0.7% potential income return in 9 days, if options expire worthlessly
Here I made a brief video explaining this trade
What happens next?
On the expiry date, September 10, 2021, EWZ is trading above $36 per share - options expire worthlessly and I keep premium - if EWZ trades under $36 on the expiry date, I will get assigned 100 shares and will have to buy them for $3,600
But as I already have collected a premium of $0.25 per share, my break-even price for this trade then is $36-$0.25 = $35.75
In case of assignment, I will turn this trade into a wheel strategy and will start selling covered calls.