I am recommending we roll our Apple (AAPL) and Target (TGT) calls to generate more income and reduce our cost basis on the positions. Both stocks are up nicely to start the new year.
Note that we are likely to hedge both companies’ upcoming earnings announcements with protective puts.
AAPL Jan Monthly (1/20) 135 Call
Current Stock Price: $135.01
Cost Basis: $149.37
Action:
- Buy to close the AAPL Jan Monthly (1/20) 135 Call for around $0.52
- Sell to open the AAPL Jan Week Four (1/27) 135 Call for around $2.15
- Set initial credit limit at $1.63, but adjust as needed to roll today
New Cost Basis: $147.74
TGT Jan 2024 (1/19/24) 150/Jan Monthly (1/20) 160 Call Spread
Note: No action is needed on the TGT Jan 2024 (1/19/24) 150 Call at this time.
Current Stock Price: $160.43
Cost Basis: $39.64
Action:
- Buy to close the TGT Jan Monthly (1/20) 160 Call for around $0.90
- Sell to open the TGT Feb Week One (2/3) 165 Call for around $1.69
- Set initial credit limit at $0.79, but adjust as needed to roll today
New Cost Basis: $38.85