New Bull Put Spread on PTON

PTON stock had a big decline today despite announcing their first $1B revenue quarter. Sounded like a key issue is trying to fill the order backlog if in a timely manner…..not a bad problem to figure out.

Based on the expectation the stock will bounce back once the “earnings traders” fade away we purchased 25 Bull Put Spreads. Stock was at $143 when we made the trade.

Sold Feb 12 $150 Puts for $8.90 and purchased Feb 12 $145 Puts (protect the position against unlimited loss should the stock not bounce back and decline further).

Should the stock be above $150 next Friday Net price was $3.20 credit. If the stock closes above $150 next Friday we would keep the premium. Max loss is $1.80 per share should the stock close below $145.

New Diagonal Bull Put Spread on ATEC

In our Schwab 401K account we have had success with a covered call strategy on ATEC. We established the CC position in Oct 2020. Since then we have rolled the options 7 times resulting in an overall profit of $22,864. Based on the success with the stock and favorable outlook and recommendation by Canaccord we expanded our position to include a Diagonal Bull Put Spread.

We established a “defined risk” put spread versus just selling the puts naked. We sold “at the money” Mar 19 $15 Puts for $1.64. and purchased Jul 16 2021 $12.50 Puts for $1.71 as a “back stop” to our short put position.

Our maximum risk is the spread between the long ($12.50) and short ($15.00) strike prices (= $2.50 per share).

Our goal is for ATEC to remain above $15 allowing the short Mar $15 puts to expire at $0 then sell April puts (hopefully followed by May, Jun and Jul Puts).

We are prepared to add to our ATEC stock position if the trade goes against us and we have to purchase the shares for $15.

This is not investment advice….just sharing a personal trade.