Credit Spread on CRBP – 5.7% potential return in 22 days
On August 27, 2020, we sold a bull put credit spread on CRBP stock with options expiry set in the next 30 days.
CRBP - Corbus Pharmaceuticals Holdings, Inc. is a Phase 3 clinical-stage pharmaceutical company focused on the development and commercialization of novel therapeutics to treat inflammatory and fibrotic diseases by leveraging its pipeline of rationally designed, endocannabinoid system-targeting drug candidates
Pharma and Biotech stocks have some juicy premiums, thats one of the reasons we like them.
Here is our trade setup:
BOT 1 CRBP SEP 18 '20 - 6 + 5 Put Bull Spread -0.39 USD
For this trade, we got a premium of 34.20 USD (after commissions) or 5.7% potential income return in 22 days.
These trades come as the #54 and #55 in the month of August, and if we stick with our trading plan for this month, the premium generated from this trade makes us about 4.56% from our $750 monthly goal, while in total we have already reached 120.45% from our monthly goal so far.
What happens next?
On the expiry date (September 18, 2020) CRBP is trading above $6 per share - options expire worthlessly and we keep premium - if CRBP trades under $5 on the expiry date, we get assigned.
But as we already have collected a premium of 0.32 per share, our break-even price for this trade then is $6-$0.34 = $5.66
In other words, CRBP can fall from the current price of $8.65 down to $5.66 and we will still be break-even
Selling Credit Spreads with CRBP stock
Running Total 2 Trades since August 27, 2020
Options income: $34
kaupeens Thu, 08/27/2020 - 11:02