Lesserweavil 7:23 am on Thursday, November 5, 2020

PTON?

Jeff – Do you have bandwidth to do an earnings analysis for PTON? Should be announcing after the bell tonight.

jefflsmith 9:39 am on Thursday, November 5, 2020

Thank you for asking. I did watch the MarketChameleon premarket show this morning. One of the stocks they reviewed was PTON. The did review absolute moves and implied move. This is new to me as I have never actually traded earnings (may have adjusted covered call strike price but have never done strangles or straddles). It looked like a move of 10% should be anticipated. I have a couple of Covered Call positions at this time. 1200 shares with a cost basis of $68. Short calls are 10 @$120, 10 @$115, 10 @$117. I am bullish on the earnings call. I should roll up the $115 and $117. Curious on your thoughts.
- Lesserweavil 10:12 am on Thursday, November 5, 2020
  
  My current position is 11/20/2020 110 Covered Calls. Stock was purchased at 75.77, in August, so is still “short term.” Calls were sold as part of a roll-up on 10/7 @17.68.
  
  I am generally bullish on the company – my feeling is that they’ve done a good job continuing to provide and improve their content and equipment offerings through the pandemic, and that they have a good eye on where they are heading for the future. That said, I tend to be wary of a run-up into earnings – perhaps its just “buy the rumor, sell the news” thinking. How is their subscriber base doing? Is it still growing or has the curve flattened?
  
  What I’m mulling – do I adjust my covered calls upwards to try to hold things past 11/20? Or even just upward to grab a bit more out of the shares? Or do I let it expire, very likely “ITM” and have the cash and a decent short term gain. Or buy back the calls at a small gain (closer to break even, frankly, with aforementioned roll) to see where the shares go? Are there any other plays here — maybe short put spread outside the anticipated move?
  
  I’ll add — sitting on my hands is an option too – see what the earnings say, and decide on the calls later.
jefflsmith 10:42 am on Thursday, November 5, 2020

Not sure of you tax status…..but I like hold the shares for 12 months and pay the long term capital gain. Much easier to make money at 15% tax rate.
I ordered a PTON bike a few weeks ago. Delivery was scheduled for Nov 2 and I pushed it out to Nov 16 (at cottage up in Canada and decided to wait a couple more weeks before returning to Boston area …between Covid and the election the cottage is nice place to hide out). I have yet to talk to a product user who doesn’t like the system they offer. I think they will continue to expand user base as long as going to a gym or spin class is a problem. In six to twelve months if the Covid treatments and vaccines have allowed more social interaction I could see the membership numbers coming under pressure (I think people miss the in person social interaction that comes from a fitness location). Until then I think they should continue to expand.
Not sure you can find another “pure Covid play” better than PTON to place the cash if you sold the shares. Unlike treatments and drugs it is a concept that works and people are utilizing. I have tried playing the treatments and drugs with limited success (GILD, Vaccine companies and most recently a BUCS on REGN …..Long May 21 $600, have been selling short term calls against). I was down as much as $9,000 on the BUCS but it is looking much better after the last couple of days.
- jefflsmith 10:45 am on Thursday, November 5, 2020
  
  I did roll all my calls to $125 this afternoon. If stock dips after the announcement I am okay holding the shares and continuing to write against them each week.
- Lesserweavil 10:50 am on Thursday, November 5, 2020
  
  Thanks, appreciate the thoughts. Leaning to “do nothing” for the time being, and seeing where PTON is in a week or two.
  - jefflsmith 6:53 am on Monday, November 9, 2020
    
    PTON taking a beating today. My decision to roll up on Friday not helping much today! Tough day for me. My account down while market has a great up day.
    - Lesserweavil 7:04 am on Monday, November 9, 2020
      
      Same/similar boat. NFLX, OSTK, ADBE also all having a bit of a rough day. None of these are expiring this week for me, thankfully. Planning to close call sides where I can, and look longer term for the rest.