Peloton Interactive (POTN) is up almost 9% since we sold a put on the stock less than 24 hours ago.
News that Amazon (AMZN) would be offering a so-called Prime Bike from Echelon Fitness for $500 that would compete with Peloton’s $1,900 bike caused a temporary dip in PTON shares yesterday. But today, Amazon came out and said it did not collaborate with Echelon on any such product and has removed it from the site.
The resulting rally in PTON is giving us the opportunity to ladder up our put option for more income.
Current Stock Price: $99.94
Cash in Hand: $0.47
- Buy to close the PTON Sep Week Four (9/25) 82.50 Put for around $0.04
- Sell to open the PTON Sep Week Four (9/25) 90 Put for around $0.29
- Set your initial credit limit at $0.25, but adjust as needed to roll today
New Cash in Hand: $0.72
Expiration: After the close on Friday, Sept. 25
Potential Rate of Return: 0.8% in four days, or 73% on an annualized basis, if this option expires worthless