I am recommending we roll the short leg of our VanEck Vectors Semiconductor ETF (SMH) LEAP call spread to generate more income and reduce our cost basis on the position.
I also want to roll our Taiwan Semiconductor Manufacturing (TSM) put out one week to generate income and buy ourselves some time. However, note that the company is scheduled to report earnings on Jan. 13. If the position is not profitable by then, we will temporarily exit and re-enter the position after the announcement.
SMH Jan 2023 (1/20/23) 250/Jan Week One (1/7) 305 Call Spread
Note: No action is needed on the SMH Jan 2023 (1/20/23) 250 Call at this time.
Current Stock Price: $305.64
Cost Basis: $72.70
Action:
- Buy to close the SMH Jan Week One (1/7) 305 Call for around $2.45
- Sell to open the SMH Jan Week Two (1/14) 305 Call for around $5.45
- Set initial credit limit at $3, but adjust as needed to roll today
New Cost Basis: $69.70
TSM Jan Week One (1/7) 130 Put
Current Stock Price: $127.41
Cash in Hand: $1.19
Action:
- Buy to close the TSM Jan Week One (1/7) 130 Put for around $3.60
- Sell to open the TSM Jan Week Two (1/14) 130 Put for around $5.55
- Set initial credit limit at $1.95, but adjust as needed to roll today
New Cash in Hand: $3.14