It’s time to re-enter our positions in Bank of America (BAC) and Citigroup (C). Both stocks are higher over the past week despite a mixed bag of earnings from the country’s biggest banks.
For its part, Bank of America reported better-than-expected first-quarter revenue of $23.33 billion and earnings per share of $0.80. Meanwhile, management said it expects solid revenue growth in the second quarter, including a 20% increase in net interest income.
Citigroup also beat analyst expectations, reporting a $2.02 per-share profit on $19.2 billion in revenue for Q1.
I am recommending puts to sell to reduce our net debits on the positions. However, you can enter today’s trades even if you were not in the previous ones. Just be aware that we will be managing and tracking based on the ongoing positions.
BAC
Current Stock Price: $39.81
Net Debit: $6.77
Action: Sell to open the BAC Apr Week Five (4/29) 38.50 Put
Current Option Price: $0.35-$0.36
Recommended Limit: Set your initial limit order at $0.35, but adjust as needed to sell a put today
New Net Debit $6.42
Expiration: After the close on Friday, April 29
Potential Rate of Return: I am targeting breakeven for this position
C
Current Stock Price: $52.84
Net Debit: $15.27
Action: Sell to open the C Apr Week Five (4/29) 52.50 Put
Current Option Price: $1.10-$1.15
Recommended Limit: Set your initial limit order at $1.12, but adjust as needed to sell a put today
New Net Debit $14.15
Expiration: After the close on Friday, April 29
Potential Rate of Return: I am targeting breakeven for this position