Did The War Room Just Pay for Your Peloton?
Members just cashed out of Peloton in a big way.
A couple of weeks ago I told War Room members about stocks that have been dominant players in their fields.
Two of them, DraftKings (Nasdaq: DKNG) and Peloton (Nasdaq: PTON), are at the top of the list, proving they are the best of breed.
In fact, Trade of the Day members cashed in on DraftKings, which I recommended to you in these very pages at around $32. The price hit $63 this morning!
Peloton is a different creature but shares the same types of characteristics. The only difference is you can’t ride your Peloton bike from your couch!
With the stay-at-home trend, people are buying exercise equipment like it’s going out of style.
And Peloton has a backlog that measures in the tens of millions of dollars. For a new company, that is astounding. And building a membership base that is paying you a monthly subscription is nothing short of gold – think about Amazon Prime, for example.
Peloton is so strong, in a little over a year since its IPO, the company is nearly profitable. Way ahead of most analysts’ expectations. That accounts for the rocket ship price action in the stock.
We’ve played it a few times in The War Room. This time, members took almost a 50% return of their premium by selling puts on Peloton. Many members made more than 50% – that’s enough to pay for a lot of monthly subscriptions for your bike, courtesy of The War Room!
When you sell a put, you are saying that you will buy the shares at a certain level if they fall to that level. In making that bet, you are paid a premium. On Peloton, I saw it was paying us massive premiums to buy the shares at $41. At the time, shares were trading for around $85, and the discount of more than 50% was too good to pass up.
The results were even better. In just two weeks the premiums collapsed by 50%, while the shares continued to rise in price. When you sell puts, you make money as the shares move higher, which placed members firmly in the driver’s seat. This morning, they cashed out by buying back those puts.
Action Plan: The market’s volatility allows savvy investors to make money in more than just the traditional ways. But you must be ready, educated and confident to make these moves. That’s what The War Room is all about – getting you ready, educated and confident so that you can act in real time to lock in gain after gain. Join me now!
P.S. You asked… and we listened. Get ready for our new service, Trade of the Day Plus, where you’ll receive one trading pick a week straight to your inbox! We’ll not only send you our top picks but also update you each week and monitor the positions throughout the entire holding time! Be on the lookout for our new service coming soon!