Started the Week With Trades With PTON, INSG, AAPL, PINS & MSFT
I had a busy first hour to the week. I did a Triple Play Hedge with Peloton (PTON), sold a 10 contract Call on Inseego (INSG), bought LEAPS on Apple (AAPL) & Pinterest (PINS) and sold a LEAPS I was holding with Microsoft (MSFT).
I started with a Triple Play Hedge on PTON. For the new readers a Triple Play Hedge (TPH) is a strategy I made up. I buy shares of the stock then I sell 3 Calls against the shares. The Calls have 3 different Strike Prices. 1 is Covered and the other 2 are Naked. With this TPH I bought 1000 shares of PTON at $72.25 and sold a 10 contract $73 Call, a 10 contract $74 Call and a 10 contract $75 Call. The $73 Call is Covered and the $74 and $75 Calls are Naked. If the stock continues up I will Cover the Calls as that happens. If the stock goes down I have the 3 Calls in place to work as hedging. If you have any questions about this strategy read my Triple Play Play page or send me an email. The premiums I received are listed next to each Call. If this works out the way I want it will be a nice money maker. My only worry is the stock goes down a few dollars. Traditionally, August is not a great month.
I hope I get assigned on the $73 Call and the stock never hits $74.
Peloton – Triple Play Hedge
8/3/20 – Buy 1000 Shares PTON @ $72.25
8/3/20 – Sell to Open 10 PTON 8/7/20 $73.00 C @ $2.00 (+$2000)
8/3/20 – Sell to Open 10 PTON 8/7/20 $74.00 C @ $1.50 (+$1500)
8/3/20 – Sell to Open 10 PTON 8/7/20 $75.00 C @ $1.25 (+$1250)
Last week I bought 1000 shares of INSG at $12.75. INSG is a 5G company I feel can do well. The only thing I don’t like about the stock is it doesn’t have weekly options. I also own a 20 contract LEAPS on the stock.
Today I sold a 10 contract $17.50 Call. I went out to $17.50 because the Call doesn’t expire until 8/21/20, 19 days away. I’m in this position for the gain in the stock. If I get assigned on this Call I’ll make some nice money on this position. I’ll make $4.75 on the stock for $4750 and the $750 with the premium.
8/3/20 – Sell to Open 10 INSG 8/21/20 $17.50 C @ 75¢ (+$750)
I bought another 1 contract LEAPS with AAPL. This goes out to June of 2022.
8/3/20 – Buy to Open 1 AAPL 6/17/22 $440.00 C @ $77.75 (Delta . 57)
I like Pinterest. It had great earnings, many new users and I feel it can become the next big social media platform. I decided to buy a 1 contract LEAPS.
8/3/20 – Buy to Open 1 PINS 1/21/22 $35.00 C @ $11.00 (Delta .66)
With MSFT on the run because of the Tik Tok news, I decided to sell one of my MSFT LEAPS. I’ve had this position since February of this year and who knows how the Tik Tok deal will work out. I decided to lock in some profit.
2/25/20 – Buy to Open 1 MSFT 1/21/22 $175.00 C @ $25.50
8/3/20 – Sell to Close 1 MSFT 1/21/22 $175.00 C @ $51.50
Profit +$2600
I was in this position for 5 months and had a nice return. I bought the LEAPS for $25.50 and sold it for $51.50. That’s a profit of $26. That’s 101.9%.
This is not a bad way to start the week!
Successful Trading,
Steve
The Options Coach