Our Bank of America (BAC) Aug Week Four (8/27) 40 Call is in the money. Rather than continue to roll the call, I am recommending we allow our shares to be called away.
We will carry over our net debit on the position, and I will recommend a put to sell to reduce that net debit after Labor Day.
If, however, BAC reverses and closes below our call’s strike, our call will expire worthless and we will sell another one.
Current Stock Price: $42.10
Cost Basis: $41.50
Action: Allow shares to be called away
Net Debit: $1.50
Potential Rate of Return: I am targeting breakeven for this position