Trades With CREE & PTON

Yesterday I bought 1000 shares of Cree (CREE) at $121.50. I haven’t been involved in this stock for a while but it used to be on my list of stocks I trade on a weekly basis. Yesterday it received an upgrade by Cowen so I got back involved. They moved the stock rating from a “Market Perform” to a “Outperform.”

I never got to report the purchase because I was waiting to get filled on my order to sell a Call. Today the market is way down and so is CREE. Yesterday I was going for a premium of $2.50 but was never filled. Today I had to lower my premium to get filled. I was just filled on 10 contracts of the CREE 2/26/21 $122 Call for a $1 premium for $1000. The premium came down a lot with the big market pullback.

Buy 1000 Shares CREE @ $121.50

Sell to Open 10 CREE 2/26/21 $122.00 C @ $1.00 (+$1000) 

This trade gets a Risk Factor 1. If I get assigned I’ll make 50¢ on the stock sale.


I also sold 20 contracts of the PTON 2/26/21 $133 Call for a premium of 50¢ for another $1000. I own 2000 shares of Peloton at $151.28 & 167.30. The stock is too low to get a premium with these shares. I decided to bring in some money and take a chance on not getting assigned. With the stock at $121.50 I sold the $133 Calls. I’ll consider this Call a Naked Call but because I own shares this trade did not affect my margin. I do have to make sure I don’t get assigned here so I’ll watch very closely. If the stock gets close to my Strike Price I’ll buy more shares to deliver on assignment. This is why I went up to the $133 Strike.

Sell to Open 20 PTON 2/26/21 $133.00 C @ 50¢ (+$1000)

This trade gets a Risk Factor 4.

If you have any questions on either one of these trades send me an email.

Successful trading,

Steve

The Options Coach