I am recommending a call to sell on our uncovered shares of Applied Materials (AMAT) to generate income and reduce our cost basis on the position.
The stock is oversold and undervalued. Therefore, we are going with a strike price that gives us a chance to pick up a good deal of appreciation in addition to income.
Current Stock Price: $83.73
Cost Basis: $96.92
Action: Sell to open the AMAT Oct Week Two (10/14) 90 Call for around $1.41, but adjust as needed to sell a call today.
New Cost Basis: $95.51