Best Buy (BBY) is moving higher on renewed optimism in the retail sector ahead of tomorrow’s release of October retail sales data.
Our short call is deep in the money. I am recommending we roll it out to the December monthly expiration and up to a higher strike price to avoid being called out of the position. While we will need to spend some cash to do so, we will pick up an additional $5 per spread in potential capital appreciation.
With the company expected to report earnings on Nov. 22, be on the lookout for a potential alert to hedge the position with a protective put.
Note: No action is needed on the BBY Jan 2024 (1/19/24) 50 Calls at this time.
Current Stock Price: $76.84
Cost Basis: $80.75
- Buy to close 3 BBY Nov Monthly (11/18) 70 Calls for around $6.85 each ($20.55 total)
- Sell to open 3 BBY Dec Monthly (12/16) 75 Calls for around $5.67 each ($17.01 total)
- Set initial debit limit at $1.18 ($3.54 total), but adjust as needed to roll today
New Cost Basis: $84.29