Quite often I write about making trades to get started on “next week’s” income. Well, I really had a killer year, and I wouldn’t mind not making any more money this year. Don’t get me wrong, I’ll still be making trades selling Covered Calls on stock I already own. Or if I see a great deal I’ll take advantage of it. And I don’t want to lose money. But I’m gonna start working on next year. With less than 3 weeks remaining to 2020 I’m gonna start working on next year’s income instead of building on 2020’s income. I think my tax bill is large enough for this year. With this in mind I just made a trade to expire on 1/15/21.
I own 2000 shares of Peloton at $135.75. I have a 20 contract Covered Call going that will expire on 12/24/20. This Call gave me a premium of $4300. Even though PTON is on a run today I don’t think it will get to my $135 Strike Price by 12/24/20. As I write the stock is at $123. If it gets close I’ll buy another 2000 shares to deliver at my $135 Strike Price because I just sold another 20 contract Call to expire on 1/15/21. If I don’t have to buy the 2000 shares to deliver the shares I own now will cover the Call I just sold. I sold 20 contracts of the PTON 1/15/21 $140 Calls for a premium of $3.85 for $7700.
Sell 20 PTON 1/15/21 $140.00 C @ $3.85 (+$7700)
This will be a great start to 2021. At the moment this is a Naked Call, but it’s $17 Out-of-the-Money and will be covered as soon as the Call position I have going until next Friday expires. Until that Call expires this trade I just made gets a Risk Factor 3.
If you have a question on this trade or any other trade I made today send me an email.
Successful trading,
Steve
The Options Coach