Our D.R. Horton (DHI) put and Danaher (DHR) bull put spread have not worked out, as both stocks sold off sharply over the past two weeks.
With DHI, I am recommending we accept shares rather than attempt to roll the put. I expect we can get back to breakeven or profitability much faster by selling calls.
As for DHR, I am recommending we close the spread at a loss. The company is scheduled to announce earnings next week. Even though I expect Danaher to continue to show strong growth, Wall Street has soured on pandemic stocks. What’s more, given this is a leveraged, higher-risk trade, I’m more inclined to cut our losses rather than risk a further sell-off in shares.
DHI Jan Monthly (1/21) 105 Put
Current Stock Price: $88.23
Cash in Hand: $1.55
Action: Accept shares
Cost Basis: $103.45
DHR Jan Monthly (1/21) 290/280 Put Spread
Current Stock Price: $282.52
Cash in Hand: $0.75
- Buy to close the DHR Jan Monthly (1/21) 290 Put for around $8.40
- Sell to close the DHR Jan Monthly (1/21) 280 Put for around $0.75
- Set initial debit limit at $7.65, but adjust as needed to close today
Loss: $6.90, or $690 per spread