Moderna (MRNA) is selling off after a big run-up in July through its early August high. The downturn accelerated this week, likely due in part to news that Chief Financial Officer David Meline is stepping down, as well as the Biden administration’s plans to stop paying for COVID-19 vaccines and treatments.
Shifting responsibility to individuals and the health care industry will give companies more control over pricing. This should have a positive, not negative, impact on Moderna’s revenue and profit margins.
I expect shares to bounce back following this sharp pullback. Therefore, although our put is deep in the money, I am recommending rolling it out two weeks. Based on the current midpoints, you should be able to get a credit for the roll, but please adjust as needed to get the trade to go off.
If the stock continues to trade at current levels, we will accept shares in September and sell calls.
If you have already been assigned shares and need guidance, please email me at [email protected].
Current Stock Price: $146.42
Cash in Hand: $0.19
- Buy to close the MRNA Aug Monthly (8/19) 172.50 Put for around $26.10
- Sell to open the MRNA Sep Week One (9/2) 172.50 Put for around $26.25
- Set initial credit limit at $0.15, but adjust as needed to roll today
New Cash in Hand: $0.34