Sold Peloton Calls to Expire Next Week

Today I have (2) 10 contract Call expiring. One is a $135 Call and the other is a $140 Call.

This morning the stock opened up. My $135 Call was covered and my $140 was Naked. The stock moved up to a high of $139.75 by 10:30am. Because of the way PTON has been moving I got worried that my $140 Call could end up a few dollars In-the-Money for the close. With the stock at $139 I decided to buy another 1000 shares to cover my $140. It turned out to be a bad move. The stock has been moving down for the rest of the day. As I write the stock is at $131. I was worried about getting assigned on my Naked $140, but I’m not even gonna get assigned on my $135. O well! It goes like that sometimes.

With the close approaching, knowing I’m not gonna get assigned, I just sold more Calls against the 2000 shares I now own. I sold 10 contracts of the $135, and 10 contracts of the $140 to expire next Friday. I got very nice premiums and I think it will work out well. For the $135 I received a premium of $4.10 for $4100, and for the $140 I received $2.75 for $2750. These premiums give me a great start to next week.

Sell to Open 10 PTON 10/23/20 $135.00 C @ $4.10 (+$4100)

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Sell toOpen 10 PTON 10/23/20 $140.00 C @ $2.75 (+$2750)

I would have been much happier if I was assigned on the 2 Calls this week but sometimes things don’t work the way you want.

Successful Trading,

Steve

The Options Coach