We have three positions expiring today.
Our Apple (AAPL) call is on track to expire worthless and we will simply watch it do so. My plan is to exit shares early next week and move on from this position. I think we can find better opportunities for our capital.
I am recommending we roll our Bank of America (BAC) and Walgreens Boots Alliance (WBA) puts to avoid assignment and buy ourselves some more time.
The sell-off in WBA earlier this week was the result of news that Amazon (AMZN) is considering launching brick-and-mortar pharmacies in the United States. This was a silly overreaction by traders, and I am confident in the company’s long-term prospects.
AAPL May Week Four (5/28) 128 Call
Current Stock Price: $125.02
Cost Basis: $125.53
Action: Watch call expire worthless
BAC May Week Four (5/28) 42.50 Put
Current Stock Price: $42.21
Cash in Hand: $0.36
Action:
- Buy to close the BAC May Week Four (5/28) 42.50 Put for around $0.33
- Sell to open the BAC Jun Week One (6/4) 42.50 Put for around $0.73
- Set your initial credit limit at $0.40, but adjust as needed to roll today
New Cash in Hand: $0.76
Expiration: After the close on Friday, June 4
Potential Rate of Return: 1.8% in 11 days, or 59% annualized, if this option expires worthless
WBA May Week Four (5/28) 55.50 Put
Current Stock Price: $52.97
Cash in Hand: $1.02
Action:
- Buy to close the WBA May Week Four (5/28) 55.50 Put for around $2.55
- Sell to open the WBA Jun Week One (6/4) 55.50 Put for around $2.60
- Set your initial credit limit at $0.05, but adjust as needed to roll today
New Cash in Hand: $1.07
Expiration: After the close on Friday, June 4
Potential Rate of Return: 1.9% in 18 days, or 39% annualized, if this option expires worthless