Walgreens Boots Alliance (WBA) made headlines this week when it said it was abandoning plans to sell its Boots and No7 Beauty businesses due to market instability negatively affecting potential buyers’ financing.
While I don’t see this having a material impact on the stock, the company is scheduled to announce earnings tomorrow.
I am recommending we roll our call out one week and use the cash to help buy a protective put to hedge against a post-earnings sell-off.
Current Stock Price: $40.62
Cost Basis: $46.58
Action:
- Buy to close the WBA Jul Week One (7/1) 42 Call for around $0.48
- Sell to open the WBA Jul Week Two (7/8) 42 Call for around $0.64
- Set initial credit limit at $0.16, but adjust as needed to roll today
- Buy to open the WBA Jul Week One (7/1) 38 Put for around $0.26
New Cost Basis: $46.68