Peleton (PTON) Covered Call Strategy +$2,771 in 33 Days, ROI of 17.9% or 198% Annualized

On August 31 we initiated a covered call position in PTON with the purchase of 200 shares at $77.26 and sale of 2 Sep 4 $77.50 Calls for $3.03. Over the 33 days we have rolled the options five times in response to movements in the price of the stock or the options expiring. The table below has the transactions. For example…the Sep 4 $77.50 calls we sold on Aug 31 for $3.03 were repurchased on Sep 4 for $1.94 generating a profit of $218. On Sep 4 we also sold Sep 11 $77.50 (Calendar roll – same strike, one week later) for $6.54. During the week leading up to Sep 11 PTON stock increased in value. When we repurchased the Sep 11 $77.50 option on Sep 11 we paid $12.41 generating a loss on the option trade of $1,174. The transactions continued as shown below.

PTON stock has increased in value from $77.26 to $107.51 over the 33 days. The CC strategy has been profitable (198% Annualized ROI) but not as profitable as just owning the stock. The position remains open looking for the stock to stabilize around $105 this week.

Yesterday I ordered a Peleton+ bike for about the amount of the profit…..does that make it free???

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