I am recommending calls to sell against our uncovered shares of Crocs (CROX) and JPMorgan Chase (JPM) and our VanEck Vectors Semiconductor ETF (SMH) LEAP.
CROX is oversold and we can capture an enormous premium for selling a call that is considerably out of the money.
JPM’s sell-off is a bit surprising in light of the Federal Reserve’s comments about raising interest rates and tapering bond purchases. But this is a top-notch bank and I expect we can make it back to breakeven over the coming weeks.
SMH is up this morning, likely getting a boost from Micron Technology’s (MU) better-than-expected earnings report and upbeat forecast. I am very bullish on the chip sector and expect to generate a large amount of cash from this position.
CROX Uncovered Shares
Current Stock Price: $134.81
Cost Basis: $156.55
Action: Sell to open the CROX Jan Monthly (1/21) 140 Call for around $7.35, but adjust as needed to sell a call today
New Cost Basis: $149.20
JPM Uncovered Shares
Current Stock Price: $155.99
Cost Basis: $161.52
Action: Sell to open the JPM Jan Week One (1/7) 160 Call for around $1.38, but adjust as needed to sell a call today
New Cost Basis: $160.14
SMH Jan 2023 (1/20/23) 250 Call
Current Stock Price: $294.99
Cost Basis: $76.45
Action: Sell to open the SMH Jan Week One (1/7) 305 Call for around $3.75, but adjust as needed to sell a call today
New Cost Basis: $72.70