I am recommending we roll our Apple (AAPL), Marvell Technology Group (MRVL) and Micron Technology (MU) calls out one week.
With AAPL, we will be rolling strike to strike and generating more cash to reduce our cost basis.
For MU and MRVL, we will be moving our calls to a higher strike in an attempt to capture more potential appreciation.
AAPL May Monthly (5/21) 128 Call
Current Stock Price: $126.32
Cost Basis: $126.42
Action:
- Buy to close the AAPL May Monthly (5/21) 128 Call for around $0.20
- Sell to open the AAPL May Week Four (5/28) 128 Call for around $1.09
- Set initial credit limit at $0.89, but adjust as needed to roll today
New Cost Basis: $125.53
Expiration: After the close on Friday, May 28
Potential Rate of Return: 1.8% in 109 days, or 6.2% annualized, if shares are called away
MRVL May Monthly (5/21) 44 Call
Current Stock Price: $45.71
Cost Basis: $50.55
Action:
- Buy to close the MRVL May Monthly (5/21) 44 Call for around $1.84
- Sell to open the MRVL May Week Four (5/28) 45 Call for around $1.52
- Set initial debit limit at $0.32, but adjust as needed to roll today
New Cost Basis: $50.87
Expiration: After the close on Friday, May 28
Potential Rate of Return: I am targeting breakeven for this position
MU May Monthly (5/21) 80 Call
Current Stock Price: $79.67
Cost Basis: $87.03
Action:
- Buy to close the MU May Monthly (5/21) 80 Call for around $0.65
- Sell to open the MU May Week Four (5/28) 81 Call for around $1.45
- Set initial credit limit at $0.80, but adjust as needed to roll today
New Cost Basis: $86.23
Expiration: After the close on Friday, May 28
Potential Rate of Return: I am targeting breakeven for this position