I am recommending we roll our Applied Materials (AMAT) and SPDR S&P Biotech ETF (XBI) puts out one week to generate more income and reduce our net debits on the positions.
With AMAT, we are also rolling up to a higher strike to capture more income following the pop in shares this week.
XBI has also moved up this week on positive headlines for some of our other stocks, namely Modena (MRNA) and Pfizer (PFE).
While the Federal Reserve announcement later today presents short-term risk, I do not see a sell-off lasting more than a day or two. However, due to the heightened near-term risk, today’s trades are only recommended for those already in the positions.
AMAT Dec Monthly (12/16) 100 Put
Current Stock Price: $112.20
Net Debit: $6.26
- Buy to close the AMAT Dec Monthly (12/16) 100 Put for around $0.09
- Sell to open the AMAT Dec Week Four (12/23) 105 Put for around $0.80
- Set initial credit limit at $0.71, but adjust as needed to roll today
New Net Debit: $5.55
XBI Dec Monthly (12/16) 80 Put
Current Stock Price: $83.49
Net Debit: $1.77
- Buy to close the XBI Dec Monthly (12/16) 80 Put for around $0.30
- Sell to open the XBI Dec Week Four (12/23) 80 Put for around $0.77
- Set initial credit limit at $0.47, but adjust as needed to roll today
New Net Debit: $1.30