The market has been unkind to Sunrun (RUN) and Squarespace (SQSP) since we entered the positions in mid-November. Both are solid companies with unique business models, though admittedly more speculative than the typical Options Income Blueprint stock.
Sunrun was caught up in a sector-wide sell-off caused by a number of factors. First was legislation in Congress seeking to ban imports from China’s Xinjiang region unless they can prove they were not made with forced labor. Then there were new proposed rules in California that would make it more expensive for homeowners to generate power from their rooftop solar panels. And finally, there was the demise of the Build Back Better package, which contained subsidies for solar.
RUN has been a one of our core stocks. Prior to the latest trade, we closed six successful trades in a row, generating $704 in cash. But RUN has become more difficult to trade in recent months, compounded by the fact that it only has monthly options. Therefore, while I am recommending we accept shares and sell calls against them to reduce our cost basis, I am removing RUN from our list of core stocks.
Squarespace is a website building and hosting company that targets small- to medium-sized businesses, an underserved part of the Internet marketplace. It has been hit hard as everything Internet infrastructure-related — from web hosting services to cloud computing companies — took it on the chin.
Our call is on track to expire worthless. I will recommend a new call soon, as I believe the stock is seriously undervalued given the company’s growth potential
RUN Jan Monthly (1/21) 45 Put
Current Stock Price: $27.12
Cash in Hand: $2.30
Action: Accept shares
Cost Basis: $42.70
Potential Rate of Return: I am targeting breakeven for this position
SQSP Jan Monthly (1/21) 35 Call
Current Stock Price: $28.98
Cost Basis: $41.60
Action: Watch call expire worthless
Potential Rate of Return: I am targeting breakeven for this position