Another Peloton Covered Call

I just made a trade I hope will become a huge winner. It’s another Covered Call with Peloton (PTON).

When the market is down because of the coronavirus PTON normally moves well. About 3 minutes into today’s session I bought 2000 shares of PTON at $47.25. I felt the stock would move up today. The low of the day is $47.08 so I got in very close to the bottom. When I bought the stock the premium for the $48 Call was about $1.50. I was hoping for a $2 premium so I placed the order for the premium I wanted. The stock started up and with the stock at $47.95 I was filled on 20 contracts of the PTON 6/19/20 $48 Call for the $2 premium. This gave me a $4000 premium on the 20 contracts.

Buy 2000 Shares PTON @ $47.25

Sell to Open 20 PTON 6/19/20 $48.00 C @ $2.00 (+$4000)

I love this trade for a number of reasons. First, the Return on Investment (ROI) is 4.2% for the 1 week option. Next, this is a Covered Call on a very good stock so it gets a Risk Factor 1. The best thing is, as I write the stock is up to $50.25. I’m already $2.50 In-the-Money. I know it’s early in the week and a lot will happen, but if I get assigned at $48 I’ll make another 75¢ on the stock. With 2000 shares I’ll make another $1500 on this Covered Call.

As usually, I hope I get assigned!

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Also, I was just filled on a 2 contract Call with NVDA. I sold a Covered Call last week but was not assigned. Still owning 200 shares, today I sold another 2 contract 6/19/20 $365 Call for a premium of $7 for a total premium of $1400.

Sell to Open 2 NVDA 6/19/20 $365.00 C @ $7.00 (+$1400)

This trade gives me a ROI of 1.9%. This gets a Risk Factor 1.

Successful Trading,

Steve

The Options Coach