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Income Masters Trade Alert: BBY

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

Action:

  • 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

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