I am recommending selling puts on Best Buy (BBY) and SPDR S&P Biotech ETF (XBI) to reduce our net debits on the positions.
BBY is rallying today with the broader market despite the company cutting its outlook for the second quarter and full year. Management also said they will pause share buybacks, although Best Buy will continue to pay its quarterly dividend.
While the retailer faces a number of economic headwinds, we will continue to trade it for its large option premiums.
We temporarily closed our XBI put to avoid risk associated with the Federal Reserve announcement. Now that it is behind us, it’s time to re-enter the position.
You can enter today’s trades even if you were not in the previous ones. Just be aware that we will be managing and tracking them based on the ongoing positions.
BBY
Current Stock Price: $77.85
Net Debit: $22.52
Action: Sell to open the BBY Aug Week One (8/5) 75 Put for around $0.87, but adjust as needed to sell a put today
New Net Debit: $21.65
XBI
Current Stock Price: $82.39
Net Debit: $12.59
Action: Sell to open the XBI Aug Week One (8/5) 80 Put for around $1.28, but adjust as needed to sell a put today
New Net Debit: $11.31