{"id":8953,"date":"2020-09-29T11:51:27","date_gmt":"2020-09-29T15:51:27","guid":{"rendered":"http:\/\/www.mainstbeatswallst.com\/?page_id=8953"},"modified":"2020-09-29T11:51:27","modified_gmt":"2020-09-29T15:51:27","slug":"sold-10-pton-naked-calls-2","status":"publish","type":"page","link":"https:\/\/www.mainstbeatswallst.com\/?page_id=8953","title":{"rendered":"Sold 10 PTON Naked Calls"},"content":{"rendered":"

\"\"<\/a>Clearly, I love trading Peloton (PTON). I made a lot of money with the stock, and selling Calls, in 2020. There are a few reasons why, which I’ll talk about .<\/p>\n

The first reason is PTON is a COVID stock, and we have been in the COVID pandemic for most of 2020. PTON sells exercise bikes that come with a subscription. With many gyms closed, for many months, there are a lot of people exercising at home. Not only is Peloton getting the bike sales, but they’re getting subscription fees every month. This has the stock on a crazy run for the entire year of 2020.<\/p>\n

Another reason why I’m doing so well with PTON is it’s Implied Volatility (IV). I will be talking more about IV but right now I will tell you I like the stock’s IV. I suggest you do some research on IV, and together with what I write you can start to understand how important it is. PTON has a high IV. A high IV makes it very inviting for option sellers because of the high premiums. High IV makes it not inviting for option buyers because of high premiums.<\/p>\n

I’ve made a lot of trades with PTON and they all involve buying the stock and selling Covered Calls, or just selling Naked Calls.<\/p>\n

The Implied Volatility (IV) gives you a number that the market thinks the stock can move, up or down, in a certain time period. Because of the stock being a COVID stock, it makes it more predictable which direction the stock will move.<\/p>\n

Before today, I have a 10 contract Covered Call with PTON which will expire this Friday. I received a $3000 premium with a Call I sold $1 Out-of-the-Money. With this one position I will make a $3000 premium and probably the $1000 on the stock assignment. Today with the stock at $99 I was filled on a 10 contract Naked Call that will expire this Friday. That’s only a few days away. I sold the $108 Strike Price and received a 70\u00a2 premium for $700. I was able to get this premium with a Call $9 Out-of-the-Money because of the IV.<\/p>\n

Sell to Open 10 PTON 10\/2\/20 $108.00 C @ 70\u00a2 (+$700)<\/strong><\/p>\n

The stock is still moving higher and I could have gotten a little more on the premium but I’m happy with the $700.<\/p>\n

This trade is a Naked Call on a hot stock so it gets a Risk Factor 4<\/strong>. It still has a long way before it gets to my Strike Price, but I’ll watch closely. I do not think it will get that high. If it does make a big move up I’ll buy another 1000 shares to cover this Call.<\/p>\n

I only touched on Implied Volatility. If you want to be a good options trader start studying IV. I will be writing more very soon.<\/p>\n

Successful trading,<\/p>\n

Steve<\/p>\n

The Options Coach<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Clearly, I love trading Peloton (PTON). I made a lot of money with the stock, and selling Calls, in 2020. There are a few reasons why, which I’ll talk about . The first reason is PTON is a COVID stock, and we have been in the COVID pandemic for most of 2020. PTON sells exercise […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-8953","page","type-page","status-publish","hentry"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/P75MP0-2kp","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/8953","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8953"}],"version-history":[{"count":1,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/8953\/revisions"}],"predecessor-version":[{"id":8954,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/8953\/revisions\/8954"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8953"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}