Options trade: ARK ETF (ARKK) Ratio Put Spread, 7/9/2021 exp | 15% return

Tue. 6/8/2021

buy +1 July 9, 2021  $101 put at $1.64 (prob ITM 22.64%)

sell -2 July 9, 2021  $100 puts at $1.47 (prob ITM 21%)

• net credit:  $1.30 x 1 x 100 =  $130
• if ARKK > $101 at exp, max profit =  $130
• if ARKK AT $100 at exp, max profit =  $230
• ARKK at $112.59 on 6/8
• stochastics "overbought"
• 31 days 'til exp (DTE)

Wed. 6/28/2021 <---  11 DTE

buy back 1 short put ($100 strike) at $0.03 to remove the risk of assignment

keep holding remaining debit put spread until expiration

Fri. 7/9/2021 <--- Expiration

ARKK closed at $125.62, so the remaining debit put spread expired "worthless."

NET PROFIT:  $125 (31 days)

Return on capital ($10,000):  15% (annualized)

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