Sold 2 Credit Spreads on FCEL – 4.02% potential income return in 22 days

On November 11, 2021, I sold 2 credit spread bull put options on FCEL stock with an expiry set in the next 22 days on December 03, 2021. For this trade, I got a premium of $80.4 (after commissions)

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.

FuelCell Energy, Inc. is an American fuel cell power company. It designs, manufactures, operates, and services Direct Fuel Cell power plants that run on natural gas and biogas.

These trades come as the #23 and #24 in the month of November, according to my trading plan for this month, the premium generated from this trade makes me about 10.72% of my $750 monthly goal.  While in total I have reached already 53.68% so far. Awesome!

Here is the trade setup:

  • BOT 2 FCEL DEC 03 '21 8 Put Option 0.13 USD

  • SLD 2 FCEL DEC 03 '21 10 Put Option 0.58 USD

For this trade, I got a premium of 80.4 USD (after commissions) or a 4.02% potential income return in 22 days, if options expire worthlessly

What happens next?

On the expiry date, December 03, 2021, FCEL is trading above $10 per share -  options expire worthlessly and I keep premium - if FCEL trades under $10 on the expiry date, I risk getting  assigned 200 shares and buying them for $2,000

But as I already have collected a premium of $0.4 per share, my break-even price for this trade then is $10-$0.4 = $11.6

In case of an assignment, I will turn this trade into a wheel, but prior to the assignment I will try to roll out this trade