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Options Trader Pro
Basic Strategies for Big Profits in Any Market

Buy Call LYFT

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.

PositionLYFT June 16 Call
Position StrategyBuy Call
Opened DateJune 7, 2024
ExpirationJune 21, 2025
Net Price15.30
Strike16
Jacob Mintz is a professional options trader and editor of Cabot Options Trader. Using his proprietary options scans, Jacob creates and manages positions in equities based on unusual option activity and risk/reward.