In all of my complaining yesterday about the dearth of decent trading opportunities, I apparently overlooked that two trades took profits–Sony (SONY) and Constellation Brands (STZ). I won’t complain about that.
Today we opened up positions on Splunk (SPLK) and Roku (ROKU). I am not in love with either of these trades (particularly not the Roku one), but money on the sidelines makes no money. They’re both trades with expirations selected to sneak in right before earnings, hoping there will be a stabilization of the stocks (or price appreciation) prior to earnings.
In our eternal battle with Peleton (PTON), it has lived to fight another day. I was going to stand pat and take on the stock today, but when it slid to around $116 in the late afternoon I changed my mind on that and rolled it out another week at the $118 strike to pick up another $240 in premium. This lowers our cost basis to $111.20 per share and gives us another week for PTON to maybe close above $118. The reason I waffled was because, though the at-the-money covered call would have brought in around $800, it would had us holding long stock during earnings. If I went to weekly covered calls to try to get the stock called away before then, those were only paying around $220 a week. If we are going to make similar premium with rolling the put a week compared to taking on the stock and selling a covered call, I’ll stick with the put for now, particularly because I am not bullish on PTON.
We should have 100 shares of BUD being called away today. There was no good reason to roll out that in-the-money covered call as we still have 100 shares with a covered call expiring 4/30. We can find another home for that capital if volatility returns after earnings. I’ll have to do a breakdown video on this BUD saga once the second lot is gone. It’s a great lesson in how sometimes taking on the stock can be more profitable (when done infrequently and on the right tickers), but also how over-trading can make you less profitable than being patient.
Communitea Trade Update: Oh Lordy Fisker (FSR) is sinking. It’s down to around $13 per share and we’re holding the $12.50 strike. This is why I don’t like EV stocks, but this is a great example for a learning exercise as a Communitea trade. You may remember our last Communitea trade ($17.50 put on SUMO) did take on heat as well before recovering and making us a nice profit. Will Fisker do the same? Who knows, but we will be patient for now and adjust if we must. I will admit I did double up on the position this afternoon when I could get $120 premium for a second contract, which brings up my average premium per contract to $100 and lowers my cost basis to an even $11.50 per share. If it keeps sinking I may look at selling a contract or two at the $10 strike, but we are nowhere near that territory yet. For now we’ll just calmly wait on this one.