Target (TGT) has run up sharply over the past six weeks and our short call is deep in the money. I am recommending we roll it out to the April monthly expiration and to a much higher strike price.
While we will need to spend some cash to do so, we are picking up an additional $10 per share in potential appreciation.
I will be recommending a protective put to hedge our position ahead of the company’s Feb. 28 earnings announcement.
If the bullish momentum in shares continues, we could get to breakeven on the position this quarter.
Note: No action is needed on the TGT Jan 2024 (1/19/24) 150 Call at this time.
Current Stock Price: $180.63
Cost Basis: $38.85
- Buy to close the TGT Feb Week One (2/3) 165 Call for around $15.75
- Sell to open the TGT Apr Monthly (4/21) 175 Call for around $14.25
- Set initial debit limit at $1.50, but adjust as needed to roll today
New Cost Basis: $40.35