I am recommending we roll our Walt Disney (DIS) and Kroger Co. (KR) calls out one week to generate more income and reduce our cost basis on the positions.
DIS has been unable to breach the $100 level, so we are moving our call down to that strike to pick up a chunk of cash.
Kroger has been in the news due to its plans to acquire competitor Albertsons for $25 billion. The Street seems uncertain about how to value the deal. There are regulatory concerns at the federal and state level. Although Kroger has said it plans to divest some assets, the uncertainty could weigh on shares.
We will continue to trade the stock until the company’s next earnings report, expected in early December. At that point, we may look to exit the position.
DIS Oct Monthly (10/21) 103 Call
Current Stock Price: $98.88
Cost Basis: $128.95
- Buy to close the DIS Oct Monthly (10/21) 103 Call for around $0.19
- Sell to open the DIS Oct Week Four (10/28) 100 Call for around $1.95
- Set initial credit limit at $1.76, but adjust as needed to roll today
New Cost Basis: $127.19
KR Oct Monthly (10/21) 45 Call
Current Stock Price: $43.08
Cost Basis: $52.28
- Buy to close the KR Oct Monthly (10/21) 45 Call for around $0.07
- Sell to open the KR Oct Week Four (10/28) 43.50 Call for around $0.72
- Set initial credit limit at $0.65, but adjust as needed to roll today
New Cost Basis: $51.63