Walgreens Boots Alliance (WBA) bucked the broader market downtrend this week. However, with the company expected to announce earnings tomorrow, I want to put a hedge in place.
I am recommending we roll our call out two weeks to generate more income, and then use that income to offset the cost of buying a protective put.
Current Stock Price: $32.35
Cost Basis: $43.25 (Note that the cost basis was incorrectly listed as $32.32 in the previous alert.)
- Buy to close the WBA Oct Week Two (10/14) 34 Call for around $0.39
- Sell to open the WBA Oct Week Four (10/28) 34 Call for around $0.73
- Set initial credit limit at $0.34, but adjust as needed to roll today
- Buy to open the WBA Oct Week Two (10/14) 29 Put for around $0.16, but adjust as needed to buy a put today
New Cost Basis: $43.07