Sold 1 Credit Spread on NYSE:MRO – 0.81% potential income return in 23 days
On August 17, 2022, I sold 1 bull put credit spread on MRO stock with an expiry set in the next 23 days. For this trade, I got a premium of $17.2 (after commissions)
Marathon Oil Corporation is an American company engaged in hydrocarbon exploration incorporated in Ohio and headquartered in the Marathon Oil Tower in Houston, Texas. The company is ranked 534th on the Fortune 500 and 1900th on the Forbes Global 2000.
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 MRO Sep09'22 21 PUT 0.41 USD
BOT 1 MRO Sep09'22 19 PUT 0.19 USD
For this trade, I got a premium of 17.2 USD (after commissions) or a 0.81% potential income return in 23 days, if options expire worthlessly
What happens next?
On the expiry date, September 09, 2022, MRO is trading above $21 per share - options expire worthlessly and I keep a premium - if MRO trades under $21 on the expiry date, I will get assigned 100 shares and will have to buy them for $2,100
But as I already have collected a premium of $0.17 per share, my break-even price for this trade then is $21-$0.17 = $20.83
In case of assignment, I will turn this trade into a wheel strategy and will start selling covered calls.