We are on track to be assigned shares of Applied Materials (AMAT). The market sell-off this week and over the past month has been particularly unkind to the semiconductor sector. Fears of still-hot inflation and further aggressive rate hikes by the Federal Reserve have hit stocks like AMAT hard.
As you know, I am bullish on the chip sector long term and believe these names are grossly undervalued. Therefore, we will sell calls against our shares to reduce our cost basis as we wait for the stock to recover.
Our Expedia (EXPE) bull put spread is on track to expire worthless. We will simply watch it do so. I will recommend a new spread to reduce our net debit on the position after next week’s Federal Reserve meeting.
AMAT September Monthly (9/16) 99 Put
Current Stock Price: $87.88
Cash in Hand: $2.08
Action: Accept shares
Cost Basis: $96.92
EXPE Sep Monthly (9/16) 95/90 Put Spread
Current Stock Price: $102.38
Net Debit: $4.07
Action: Watch spread expire worthless