I am recommending we roll our Advanced Micro Devices (AMD), Bank of America (BAC) and Intel (INTC) puts. The goal with each is to avoid potential assignment while also bringing in additional income.
AMD Oct Week Five (10/30) 77 Put
Current Stock Price: $78.09
Cash in Hand: $0.79
Action:
- Buy to close the AMD Oct Week Five (10/30) 77 Put for around $0.48
- Sell to open the AMD Nov Week One (11/6) 75 Put for around $1.45
- Set your initial credit limit at $0.97, but adjust as needed to roll today
New Cash in Hand: $1.76
Expiration: After the close on Friday, Nov. 6
Potential Rate of Return: 2.3% in 11 days, or 78% on an annualized basis, if this option expires worthless
BAC Oct Week Five (10/30) 24 Put
Current Stock Price: $23.36
Cash in Hand: $0.30
Action:
- Buy to close the BAC Oct Week Five (10/30) 24 Put for around $0.69
- Sell to open the BAC Nov Week One (11/6) 24 Put for around $1.11
- Set your initial credit limit at $0.42, but adjust as needed to roll today
New Cash in Hand: $0.72
Expiration: After the close on Friday, Nov. 6
Potential Rate of Return: 3% in 11 days, or 100% on an annualized basis, if this option expires worthless
INTC Oct Week Five (10/30) 45.50 Put
Current Stock Price: $44.21
Net Debit: $7.16
Action:
- Buy to close the INTC Oct Week Five (10/30) 45.50 Put for around $1.34
- Sell to open the INTC Nov Week One (11/6) 45 Put for around $1.79
- Set your initial credit limit at $0.45, but adjust as needed to roll today
New Net Debit: $6.71
Expiration: After the close on Friday, Nov. 6
Potential Rate of Return: I am targeting breakeven for this position