Sold a 10 Contract Call With Peloton

The loyal Main Street beats Wall Street readers know I’ve been playing Peloton (PTON) like a piano. And for many months!

Last week, you’ll remember, I had a 10 contract Covered Call which was to expire Friday. With a Strike Price of $72, and the stock around $67, on Thursday I sold another 10 contract Call to expire the next Friday. This Call was Naked until the 1st Call expired. I felt the stock was not going to hit $72 in the 1 day remaining to expiration, so I sold the other Call early for the higher premium. The stock did not hit the $72 Strike Price and the 1st Call expired.

Today I made the same move. PTON is at $67.80 and I have that $72 Covered Call going. Again, I feel the stock will not hit $72 by Friday so I sold another 10 contract Call. This is also a $72 Call to expire next Friday.

If PTON does hit $72 by this Friday I’ll get assigned and the Call I sold today will remain Naked. I hope the stock does not hit $72, the Call expires, And the shares I own will cover the new Call I just sold.

I sold the PTON 9/4/20 $72 Call for a premium of $1.30. I received a nice premium because there is 10 days until expiration.

Sell to Open 10 PTON 9/4/20 $72.00 C @ $1.30 (+$1300)

If you have any questions on this trade send me an email. The bottom line is, I own 1000 shares of the stock and have (2) 10 contract Calls sold against them. 1 is covered and the other is Naked. The Naked Call I sold today gets a Risk Factor 5. Once the 1st Call expires on Friday the 2nd Call will become Covered and that position will have a risk factor 1.

Successful trading,

Steve

The Options Coach