On December 08, 2021, I sold 2 bull put credit spreads on SPCE stock with an expiry set in the next 15 days. For this trade, I got a premium of $62.4 (after commissions)
Virgin Galactic is an American spaceflight company founded by Richard Branson and his British Virgin Group retains an 18% stake through Virgin Investments Limited. It is headquartered in California, USA, and operates from New Mexico
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:
BOT 2 SPCE DEC 23 '21 - 16 + 15 Put Bull Spread -0.36 USD
For this trade, I got a premium of 62.4 USD (after commissions) or a 1.95% potential income return in 15 days, if options expire worthlessly
What happens next?
On the expiry date, December 23, 2021, SPCE is trading above $16 per share - options expire worthlessly and I keep premium - if SPCE trades under $16 on the expiry date, I risk getting assigned 200 shares and will have to buy them for $3,200
But as I already have collected a premium of $0.31 per share, my break-even price for this trade then is $16-$0.31 = $15.69
In case of assignment, I will turn this trade into a wheel strategy and will start selling covered calls.