As I said with our recent closeouts of Kroger (KR) and Walt Disney (DIS), I do not take losses lightly, but there are times it must be done. We have reached this point with Walgreens Boots Alliance (WBA).
Shares fell nearly 40% this year before bottoming out in early October. In addition to the broader bear market, the stock was hit by the proposed Boots sale falling through, as well as opioid lawsuits against the company.
While shares have rebounded off their lows, I view the stock as having more downside risk than upside potential. At best, I think it is dead money for the next few quarters. Therefore, I want to book the loss and refocus our capital on more lucrative opportunities.
Let’s spend a few cents to close the position now rather than risk being assigned shares.
Current Stock Price: $41.20
Net Debit: $7.90
Action: Buy to close the WBA Dec Week One (12/2) 40 Put for around $0.02, but adjust as needed to close today
Loss: $7.92, or $792 per contract