As income investors, we seek to create consistent monthly income by selling options to collect monthly premiums. This has been successful for our investors for years. Option selling offers another method to diversify investing strategies beyond traditional dividend investing. We have combined technical stock events with our strategy to identify high returns option selling opportunities. This income trade will generate a return of 12% return.
Stock: Spark Therapeutics, Inc. (ONCE) is a gene therapy company. The Company focuses on treating orphan diseases. It has a pipeline of product candidates targeting multiple rare blinding conditions, hematologic disorders and neurodegenerative diseases. Its pipeline includes a product candidate targeting choroideremia (CHM), which is in a Phase I/II clinical trial and a product candidate for hemophilia A, which is in a Phase I/II clinical trial. Its product investigational candidate, voretigene neparvovec, is intended to treat a genetic blinding condition or inherited retinal disease (IRD).
We have identified a a pattern called Flag (Bullish), providing a target price for the short-term in the range of 90.00 to 93.00 on Spark Therapeutics (ONCE). The faster moving average recently crossed above the slower moving average, signaling a new uptrend has been established.
A Flag (Bullish) is considered a bullish signal, indicating that the current uptrend may continue. After a steep rise in price, the pennant reflects a temporary pause in the uptrend, consisting of two parallel trendlines that form a rectangular flag shape.
Spark Therapeutics announced on August 9 the closing of the previously announced underwritten public offering of its common stock pursuant to an automatically effective shelf registration statement that was previously filed with the Securities and Exchange Commission, including the exercise in full by the underwriters of their option to purchase an additional 690,789 shares from Spark at the public offering price of $76.00 per share, less the underwriting discount. The exercise of the option brought the total number of shares sold in the offering to 5,296,053, and increased the aggregate net proceeds to Spark to approximately $380.4 million, after deducting underwriting discounts and before offering expenses.
Strategy: We want to sell a covered on ONCE using the September 2017 80 Call. For each 100 shares of ONCE stock you buy, sell one Sept 80 PUT for a $3.50 credit or better. Your cost of the trade is ~$71.75 or so on a stock currently trading above $75 per share. That’s potentially a 11.5% return in 28 days for an assigned trade.
This is a great example of how investors can create monthly cash from these income producing strategies. This is an excellent way to create a side hustle income without consuming too much of your time each day. For others, they have built an income large enough to live on without being employed by the man. When your monthly income exceeds your living expenses, you have achieved financial independence.
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