We accepted shares in a number of Options Income Blueprint positions last week. As I said, the math of selling calls simply makes more sense in the current market environment than continuing to roll the puts. Not only will we be able to collect cash, but we can capture potential appreciation when the market recovers.
The goal will be to generate a 0.5% cash return on these positions. However, we may accept a lower cash rate of return if I believe there is significant potential for short-term appreciation.
I am recommending calls to sell on Lyft (LYFT) and Sunrun (RUN).
These are two of the most volatile stocks we trade, and both have been cut in half since we entered the positions. However, I am not ready to give up on them.
Lyft more than doubled its revenue in the first quarter thanks to a strong rebound in ridership. However, the company warned it will need to spend more to attract drivers and grow its ride-hailing platform.
In the current environment, this will be a necessary growing pain. Yet, as ridership continues to recover from its pandemic slump, I expect LYFT to recover as well.
RUN is one of my two favorite solar stocks. The other is First Solar (FSLR).
Sunrun has the equivalent of a leasing business model in which the cash from new leases reduces borrowing costs for new installations. While the company is not profitable, it has been growing revenue 25% a year.
This week, Goldman Sachs (GS) touted the stock as the best way to invest in residential solar growth, while downgrading two of its competitors.
Note that these trades are only for members who already own shares uncovered from previous positions.
LYFT Uncovered Shares
Current Stock Price: $15.11
Cost Basis: $21.45
Action: Sell to open the LYFT Jul Week One (7/1) 16 Call
Current Option Price: $0.38-$0.42
Recommended Limit: Set your initial limit order at $0.40, but adjust as needed to sell a call today
New Cost Basis: $21.05
Expiration: After the close on Friday, July 1
Potential Rate of Return: I am targeting breakeven for this position
RUN Uncovered Shares
Current Stock Price: $23.38
Cost Basis: $44.98
Action: Sell to open the RUN Jul Monthly (7/15) 25 Call
Current Option Price: $1.43-$1.52
Recommended Limit: Set your initial limit order at $1.47, but adjust as needed to sell a call today
New Cost Basis: $43.51
Expiration: After the close on Friday, July 15
Potential Rate of Return: I am targeting breakeven for this position