Sold 1 Credit Spread on CAH – 0.7% potential income return in 32 days

On September 27, 2021, I sold 1 bull put credit spread on CAH stock with an expiry set in the next 32 days. For this trade, I got a premium of $35.20 (after commissions)

Cardinal Health, Inc. is an American multinational health care services company and the 14th highest revenue-generating company in the United States. Its headquarters are in Dublin, Ohio, and Dublin, Ireland.

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.

These trades come as the #44 and #45 in the month of September, according to my trading plan for this month, the premium generated from this trade makes me about 3.52% of my $1,000 monthly goal.  While in total I have reached already 113.98% so far. Awesome!

Here is the trade setup:

  • SLD 1 CAH OCT 29 '21 50 Put Option 0.90 USD

  • BOT 1 CAH OCT 29 '21 48 Put Option 0.50 USD

For this credit spread, I got a credit of 35.2 USD (after commissions) or a 0.7% potential income return in 32 days, if options expire worthlessly

What happens next?

On the expiry date, 0ctober 29, 2021, CAH is trading above $50 per share -  options expire worthlessly and I keep premium - if CAH trades under $50 on the expiry date, I will get assigned 100 shares and will have to buy them for $5,000

But as I already have collected a premium of $0.35 per share, my break-even price for this trade then will be $50-$0.35 = $49.65

In case of assignment, I will turn this trade into a wheel strategy and will start selling covered calls