Sold 7 Credit Spreads on SESN – 11.80% potential income return in 42 days

On August 09, 2021, I sold 7 bull put credit spreads on SESN stock with an expiry set in the next 42 days (September 17, 2021). For this trade, I got a premium of $330.40 (after commissions)

SESEN BIO is a biotech company from Massachusets, US

These trades come as the #4 and #5 in the month of August, and according to my trading plan for this month, the premium generated from this trade makes me about 23.6% of my $1,400 monthly goal.  While in total I have reached already 58.54% so far. Awesome.

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Here is the trade setup:

  • BOT 7 SESN SEP 17 '21 - 4 + 3 Put Bull Spread -0.521 USD

For this trade, I got a premium of 330.4 USD (after commissions) or an 11.8% potential income return in 42 days, if options expire worthlessly

YTD this stock is up by more than 200%, time will show was it worth putting my strike prices so close to the market price.

What happens next?

On the expiry date, September 17, 2021, SESN is trading above $4 per share -  options expire worthlessly and I keep premium - if SESN trades under $4 on the expiry date, I will get assigned 700 shares and will have to buy them for $2,800

But as I already have collected a premium of $0.47 per share, my break-even price for this trade then is $4-$0.47 = $3.53

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

From the premium received I bought additional 3 shares with INTC stock. This purchase will contribute to my dividend portfolio on average an additional $0.30 every month. Not the biggest addition, but every bit counts.

This is what I plan to do by the end of this year - reinvesting most of the premiums received into dividend-paying stocks, for this year my goal is to reach at least $65 in projected monthly income.