On November 10, 2021, I sold 1 bull put credit spread on JETS ETF with an expiry set in the next 30 days. For this trade, I got a premium of $39.20 (after commissions)
The U.S. Global Jets ETF (JETS) provides investors access to the global airline industry, including airline operators and manufacturers from all over the world.
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These trades come as the #19 and #20 in the month of November, according to my trading plan for this month, the premium generated from this trade makes me about 5.22% of my $750 monthly goal. While in total I have reached already 39.54% so far. Awesome!
I sold quite aggressively, selling near the money strike price, but I'm ready to take the risk, and in case of danger will try to roll down the strike prices.
Here is the trade setup:
SLD 1 JETS DEC 10 '21 24 Put Option 0.69 USD
BOT 1 JETS DEC 10 '21 22.5 Put Option 0.25 USD
For this credit spread, I got a credit of 39.2 USD (after commissions) or a 1.63% potential income return in 30 days, if options expire worthlessly
What happens next?
On the expiry date, December 10, 2021, JETS is trading above $24 per share - options expire worthlessly and I keep premium - if JETS trades under $24 on the expiry date, I will get assigned 100 shares and will have to buy them for $2,400
But as I already have collected a premium of $0.39 per share, my break-even price for this trade then will be $24-$0.39 = $23.61
In case of assignment, I will turn this trade into a wheel strategy and will start selling covered calls