Sold 1 Put Option on NYSE:SPCE – 0.8% potential income return in 2 days
On August 03, 2022, I sold 1 put option on NYSE: SPCE stock with an expiry set in the next 2 days (August 0.5). For this trade, I got a premium of $5.6 (after commissions)
Virgin Galactic is an American spaceflight company founded by Richard Branson and his British Virgin Group retains an 11.9% stake through Virgin Investments Limited. It is headquartered in California, USA, and operates from New Mexico.
Why did I place this trade?
I have been trading SPCE stock since its inception on NYSE back in 2019
My 4-year-old daughter talked about space travel today
What I missed though - there is an earnings date tomorrow August 04 and stock could go to 0. Seems I was just too excited about kiddo talking about space travel.
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 SPCE NYSE Aug05'22 7 PUT 0.08 USD
At the time when I submitted this contract, probability of expiring worthless was 89%, but the upcoming earnings report can send it down (or up)
For this credit spread, I got a credit of 5.6 USD (after commissions) or about 0.8% potential income return in 2 days, if options expire worthlessly
What happens next?
On the expiry date, August 05, 2022, SPCE is trading above $7 per share - options expire worthlessly and I keep a premium - if SPCE trades under $7 on the expiry date, I will get assigned 100 shares, and will have to buy them paying $700
Break-even price: $7-0.05= $6.95
In case of an assignment, I will start selling covered calls on this position.
Running Total 1 Trade since August 5, 2022
Options income: $6