Sold 10 Peloton Naked Calls

I have (2) 10 contract Covered Calls going with Peloton (PTON) that will expire this Friday. The COVID stock has been moving and it looks like I’ll get assigned on both of these Covered Call positions. With this in mind, with the stock at $98.50, I just sold a 10 contract Naked Call on the stock. Some might say I’m nuts selling a Naked Call on a very hot stock, but with the stock at $98.50 I sold 10 $114 Calls to expire next Friday, Oct 2nd. I’ll be watching very closely, but I don’t think the stock will hit $114 by next Friday. If the stock continues on the big run, and gets close to $114 per share, I’ll buy the 1000 shares to cover the Naked Call.

Sell to Open 10 PTON 10/2/20 $114.00 C @ $1.20 (+$1200)

I think this is a great premium for the 10 day Call. For the stock to move another $15, on top of what it already did, would be amazing! I’m willing to make this trade with a lot of room to buy the shares if needed.

I think this is a safe trade, however, it is a Naked Call on a very hot stock. This trade gets a Risk Factor 4.

Successful trading,

Steve

The Options Coach