Trade Adjustment: Rolled Forward and Down 2 CLNE Credit Spreads - 6.06% potential income return in 182 days
On December 06, 2021, I rolled forward and down 2 credit spreads on the CLNE stock, I originally established back in the middle of September 2021.
As the expiry date approached (December 17, 2021) and CLNE was already in the money, and not wanting yet to turn this trade into a covered call or to close with a loss, I decided to roll it out and avoid the assignment next Friday.
Clean Energy Fuels Corp. provides natural gas as an alternative fuel for vehicle fleets and related fueling solutions, primarily in the United States and Canada
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 2 CLNE DEC 17 '21 - 7 + 5 Put Bull Spread -0.64 USD
BOT 2 CLNE MAR 18 '22 - 6 + 4 Put Bull Spread -0.60 USD
Here I bought back the 7/5 credit spread put and sold a new credit spread with lower strike prices (6/4) and with an expiry set in March 2022.
What happens next?
On the expiry date, March 18, 2022, CLNE is trading above $6 per share - options expire worthlessly and I keep premium - if CLNE trades under $6 on the expiry date, I risk getting assigned 200 shares
New break-even price $6-$0.36 = $5.64
In case of an assignment, I will turn this trade into a wheel strategy and will start selling covered calls on CLNE stock