I am recommending we roll the short leg of our Target (TGT) LEAP call spread out one week and to a lower strike to generate more income.
Because the retailer is scheduled to announce earnings tomorrow, I am also recommending we spend some cash to purchase a protective put.
Note: No action is needed on the TGT Jan 2023 (1/20/23) 200 Call at this time.
Current Stock Price: $213.36
Cost Basis: $50.72
- Buy to close the TGT May Monthly (5/20) 232.50 Call for around $1.17
- Sell to open the TGT May Week Four (5/27) 230 Call for around $2.24
- Set initial credit limit at $1.07, but adjust as needed to roll today
- Buy to open the TGT May Monthly (5/20) 195 Put for around $1.23
New Cost Basis: $50.88