Moderna (MRNA) has sold off over the past few weeks after running up on positive news about its personalized vaccine candidate for melanoma and its experimental RSV vaccine. This is likely due in part to profit-taking and in part to Pfizer (PFE) forecasting a larger-than-expected decline in sales of its COVID-19 vaccine and treatment for 2023.
MRNA is deeply undervalued and offers large premiums. Furthermore, I am optimistic about how it will perform throughout the year.
I am recommending we roll our put out one week and down to reduce our risk and buy ourselves some time for shares to recover. The spreads are wide, so work your limit orders.
Note that the company is scheduled to report earnings on Feb. 23. We will either temporarily exit the position or hedge with a long put ahead of the announcement.
Current Stock Price: $165.10
Net Debit: $21.05
- Buy to close the MRNA Feb Week Two (2/10) 175 Put for around $10
- Sell to open the MRNA Feb Monthly (2/17) 172.50 Put for around $9.40
- Set initial debit limit at $0.60, but adjust as needed to roll today
New Net Debit: $21.65