Our Expedia (EXPE) bull put spread is well out of the money. I am recommending we close the top leg for a few cents and watch the bottom leg expire worthless. This will allow us to enter a new spread to generate more income and reduce our net debit on the position.
You can enter today’s trade even if you were not in the previous one. Just be aware that we will be managing and tracking it based on the ongoing position.
If you are new to spread trading, please watch my Bull Put Spread Coaching before entering the trade.
Current Stock Price: $95.82
Net Debit: $3.50
- Buy to close the EXPE Oct Week One (10/7) 85 Put for around $0.03
- Watch the EXPE Oct Week One (10/7) 80 Put expire worthless
- Sell to open the EXPE Oct Monthly (10/21) 90 Put for around $2.06
- Buy to open the EXPE Oct Monthly (10/21) 85 Put for around $1.03
- Set initial credit limit at $1.03, but adjust as needed
New Net Debit: $2.50