I am recommending we roll the short leg of our Apple (AAPL) LEAP call spread. However, with the company set to announce earnings next week, I am also recommending we buy a protective put. This will create a collar, and the income from the roll will help cover the cost of the put.
If you are new to this strategy, you can learn about it in my Coaching Session on Hedging Positions.
Note: No action is needed on our AAPL Sept 2022 Call (9/16/22) 120 Call at this time.
Current Stock Price: $147.33
Cost Basis: $33.87
- Buy to close the AAPL Jul Week Four (7/23) 150 Call for around $0.16
- Sell to open the AAPL Aug Week One (8/6) 152.50 Call for around $1.92
- Set initial credit limit at $1.76
- Buy to open the AAPL Jul Week Five (7/30) 144 Put for around $1.96
New Cost Basis: $34.07