Kroger Co. (KR) looks to have put in a short-term bottom. I am recommending a call to sell against our uncovered shares. The income we generate will reduce our cost basis on the position.
Note that this trade is only for people who already own shares of KR uncovered from a previous position.
I am also recommending a new Microsoft (MSFT) bull put spread to reduce our net debit on the position. You can enter today’s trade even if you were not in the previous one. Just be aware that we will be managing and tracking it based on the ongoing position.
If you are new to spread trading, please watch my Bull Put Spread Coaching Session before entering the trade.
KR Uncovered Shares
Current Stock Price: $55.19
Cost Basis: $58.88
Action: Sell to open the KR May Monthly (5/20) 57 Call for around $0.61, but adjust as needed to sell a call today
New Cost Basis: $58.27
Current Stock Price: $254.78
Net Debit: $2.45
- Sell to open the MSFT May Week Four (5/27) 230 Put for around $2.63
- Buy to open the MSFT May Week Four (5/27) 220 Put for around $1.50
- Set initial credit limit at $1.13, but adjust as needed to sell a spread today
New Net Debit: $1.32