The short leg our Target (TGT) LEAP call spread is in the money following a run-up in the stock. I am recommending we roll out one month and to a higher strike. We will be spending some cash to do so but capturing an additional $10 in potential appreciation.
With the company scheduled to announce earnings next week, I am also recommending that we spend some cash to buy a protective put.
Note: No action is needed on the TGT Jan 2023 (1/20/23) 200 Call at this time.
Current Stock Price: $260.67
Cost Basis: $59.27
- Buy to close the TGT Nov Monthly (11/19) 250 Call for around $13.55
- Sell to open the TGT Dec Monthly (12/17) 260 Call for around $9.50
- Set initial debit limit at $4.05, but adjust as needed to roll today
- Buy to open the TGT Nov Monthly (11/19) 240 Put for around $1.45, but adjust as needed
New Cost Basis: $64.77