Assigned on PTON Covered Calls, Realized Profit of $21,915 in 155 Days, Return of 32.4% or 76% Annualized.

Over the past 155 days we have been developing our PTON covered call strategy by rolling weekly options (see table below for the weekly rolls). On Friday our order to roll did not get executed and the shares got called away. We didn’t want the shares to get called as it creates a tax liability (short term capital gains). Our plan was to keep rolling until we had held the shares for 12 months and taxes would be at the long term capital gain rate. However, a realized gain is better than a loss so happy with the outcome.

Highlighted in the green …..We attempted to buy Puts for downside protection….and lost over $10,000 of “insurance” money. I don’t plan on purchasing Puts as insurance going forward. I am looking for a way to “hedge” the volatility. Considering selling deeper “in the money” calls as one option.

We do plan on establishing a new position this week selling “at the money” puts and looking to be assigned (collect the premium to discount acquisition price).

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???

Covered Call on PTON Assigned, Profit $6,090 in 19 Days, 9.6% ROI or 184% Annualized

On Friday PTON stock closed above our strike price of $66 and stock was assigned. We purchased the stock on July 20. Calendar roll on 7/24 and Diagonal Roll up from $63.50 to $66 on Jul 31. We had an order in for a diagonal roll up on Aug 7 but didn’t get filled resulting in the assignment. Intend to establish a new covered call position in PTON today.

Stock price dropped early in the position (blue line) with the profit from the option offsetting. Stock price started improving 7/24. Option premiums on PTON are excellent due to volatility. Options added an incremental $3,560 in profit to the position.

Assigned on 14 PTON Covered Calls, 49 Days Profit +$8,492 15% or 119% Annualized.

On Friday 14 Jun 5 $42.50 covered calls on PTON were assigned and called away. We tried to do a diagonal roll to Jun 12 $45 but the prices were not reasonable so we let them get called away. We established 36 new covered calls on Friday in anticipation of assignment and wanting to continue to have a CC position in PTON. We have been working the PTON covered call position for 49 days. We rolled the strike prices up, down and out.

The assignment created a profit of $8,492. We generated profit on both stock appreciation ($6,750) and short options ($1.742). PTON is a volatile stock driving excellent option premiums.

The assignment creates a change in where the profitability is derived. The stock were assigned (sold) at $42.50. On Friday the stock closed at $45.90. The blue line shows the drop in profit on the stock. The value of the short option goes to $0 with the assignment. It closed on Friday at $(1.57). The orange line show the increase in profit from the short options.

Update PTON CC, 9 Rolls/Assign in 43 Days +$8,401, 52.2% or 443% Annualized

Starting April 20 we worked our CC strategy on PTON. Over 43 days we have done 5 “Diagonal Roll Ups”, 1 “Vertical Roll Down”, 2 Calendar Rollouts” and been “Assigned” once.

Current calls are deep in the money due to rise in stock price this week.

The recent rise has increased the profitabilty of the stock and increased the losses on the options.