Sold 1 Credit Spread on PFE – 0.67% potential income return in 9 days

On August 25, 2021, I sold 1 bull put credit spread on PFE stock with an expiry set in the next 9 days. For this trade, I got a premium of $31.20 (after commissions)

Pfizer Inc. is an American multinational pharmaceutical and biotechnology corporation headquartered on 42nd Street in Manhattan, New York City. The company was established in 1849 in New York by two German immigrants, Charles Pfizer and his cousin Charles F. Erhart

These trades come as the #28 and #29 in the month of August, according to my trading plan for this month, the premium generated from this trade makes me about 2.22% of my $1,400 monthly goal.  While in total I have reached already 113.94% so far. Awesome.

Here I made a quick YouTube video about this trade

Here is the trade setup:

  • BOT 1 PFE SEP 03 '21 - 46.5 + 44.5 Put Bull Spread -0.36 USD

For this trade, I got a premium of 31.2 USD (after commissions) or a 0.67% potential income return in 9 days, if options expire worthlessly

YTD PFE is up by almost +30%

What happens next?

On the expiry date, September 03, 2021, PFE is trading above $46.5 per share -  options expire worthlessly and I keep premium - if PFE trades under $46.5 on the expiry date, I will get assigned 100 shares and will have to buy them for $4,650

But as I already have collected a premium of $0.31 per share, my break-even price for this trade then is $46.5-$0.31 = $46.19

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

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