Bank of America (BAC) reported better-than-expected fourth-quarter results, as the bank benefitted from higher rates, which helped offset declines in investment banking. Yet, shares sold off as CEO Brian Moynihan offered a muted outlook for 2023.
With shares bouncing off this morning’s lows, I am recommending we sell a put to generate income and reduce our net debit on the position.
You can enter today’s trade even if you were not in the previous one. Just be aware that we will be managing and tracking it based on the ongoing position.
Current Stock Price: $34.29
Net Debit: $10.37
Action: Sell to open the BAC Jan Week Four (1/27) 33.50 Put
Current Option Price: $0.33-$0.35
Recommended Limit: Set your initial limit order at $0.34, but adjust as needed to sell a put today
Expiration: After the close on Friday, Jan. 27
New Net Debit: $10.03
Potential Rate of Return: I am targeting breakeven for this position