Buy Call LYFT

October 31, 2024
Adjust Existing Position: Against LYFT Stock, Buy Back the November 13 Calls (exp. 11/1) and Sell the November 12.5 Calls (exp. 11/15)

Our several rounds of call sales in LYFT have worked well, and we are going to keep the trade going by rolling to a new sale today. Here are the details …

Two weeks ago, we sold the LYFT November 13 calls expiring 11/1 for $0.89 as a way to play decay ahead of the company’s earnings, and the election. Today we are going to buy back that call for $0.40 (approximately), so that we can then sell the November 12.5 call expiring 11/15 for $1.40 (approximately) … of note, by selling the 11/15 call we will hold this position through earnings and the election.

To execute this trade you need to:
Buy to Close the LYFT November 13 Calls (exp. 11/1)
Sell to Open the LYFT November 12.5 Calls (exp. 11/15)

After this adjustment our position will be:
Long LYFT stock
Short LYFT November 12.5 Calls (exp. 11/15)

The reason I am selling the November 12.5 strike call is I want to collect a bigger premium just in case LYFT stock falls on earnings or the election in the coming weeks.

October 16, 2024
Adjust Existing Position/See Expirations and Strike Prices: Against LYFT Stock, Buy Back the October 13 Calls, and Sell the November 13 Calls (exp. 11/1)

Ahead of expiration on Friday LYFT is trading at 13.40, and the October 13 calls that we sold for $0.50 are now worth $0.50. The reason the calls are now at a breakeven is because the stock has recovered nicely in the last month (good).

Today let’s buy back those October 13 calls so that we can then sell the November 13 calls expiring November 1 which is days before the election and Lyft’s earnings (the earnings date is not yet confirmed, but is likely the week of November 4).

To execute this trade you need to:
Buy to Close the LYFT October 13 Calls
Sell to Open the LYFT November 13 Calls (exp. 11/1).

After this adjustment our position will be:

Long LYFT Stock

Short November 13 Calls (exp. 11/1).

Essentially, today’s adjustment is a play on selling an option that will expire days before the election/earnings, and then once that 11/1 call expires we will sell a new call ahead of those two events.

August 22, 2024
Adjust Existing Position: Against LYFT Stock, Sell the October 13 Call for $0.45 or more.

As I noted after LYFT stock got nailed on earnings, call buyers immediately started accumulating bullish positions into the stock decline. Those trades are why I decided to hold off on selling a new call against our stock position.

For now at least, that decision to hold off on selling a new call was the right move as LYFT stock has bounced nicely ($2.50), though from depressed levels.

Today, let’s get back into selling volatility in LYFT via a sale of the October 13 Calls, which would give the stock another $1.30 of room to the upside.

To execute this trade you need to:
Sell to Open the LYFT October 13 Calls.

Please note, if you don’t yet have a LYFT covered call position, I am “good” with you entering this trade today as the stock has been improving, and to collect $0.45 is a nice premium to sell.

June 28, 2024
Adjust Existing Position: Against LYFT Stock, Sell the August 16 Call (exp. 8/16) for $0.65 or more.

LYFT stock is trading higher by 6% today at 14.20. Let’s take advantage of this stock strength to sell a new call against our stock position, which will lower our cost basis on our covered call to 14.65 (approximately), while still giving the trade plenty of upside potential as well (room to 16).

To execute this trade you need to:
Sell to Open the LYFT August 16 Call

Please note, because I’m pushing this call sale out to August, we will likely hold this trade through the company’s next earnings report.

June 7, 2024
Covered Call: Buy Lyft (LYFT) Stock and Sell the June 16 Call (exp. 6/21) for a net price of $15.60 or less.

Despite the market trading at new highs, under the surface the action in countless stocks has been less impressive, and maybe even concerning. Essentially, it feels like the market is a toss-up right now as I could see it falling, trading sideways, or moving higher.

Today, let’s play the sideways/moving higher game by selling a covered call in Lyft (LYFT) which upped its guidance on Thursday and received several upgrades today.

To execute this trade you need to:

Buy LYFT Stock

Sell to Open the June 16 Call.

The most you can make on this trade is $40 per covered call should LYFT close above 16 on June expiration, or a yield of 2.56% in two weeks’ time. (You should beat my recommended price as usual, which would bump up the profit/yield noted above.)

The most you can lose on this trade is $1,560 per covered call if LYFT stock were to go to zero.

The breakeven on this trade is 15.60.

Essentially, let’s see where the market and LYFT are on June expiration, and if the stock is mostly unchanged, or higher, we will walk away with a small but decent yield in a short amount of time … and if the stock is below 16, we might continue to sell calls via the July expiration cycle.