Our Bank of America (BAC), Citigroup (C) and Delta Air Lines (DAL) puts are in the money after the stocks got hit in the broader market sell-off. I am recommending we roll our puts out one week to avoid potential assignment and generate more income.
Note that these trades are only for members already in the positions.
BAC May Week Two (5/13) 35.50 Put
Current Stock Price: $35.05
Net Debt: $8.86
Action:
- Buy to close the BAC May Week Two (5/13) 35.50 Put for around $0.74
- Sell to open the BAC May Monthly (5/20) 35.50 Put for around $1.19
- Set your initial credit limit at $0.45, but adjust as needed to roll today
New Net Debit: $8.41
Expiration Date: After the close on Friday, May 20
Potential Rate of Return: I am targeting breakeven for this position
C May Week Two (5/13) 49 Put
Current Stock Price: $47.22
Net Debt: $17.82
Action:
- Buy to close the C May Week Two (5/13) 49 Put for around $1.94
- Sell to open the C May Monthly (5/20) 49 Put for around $2.44
- Set your initial credit limit at $0.50, but adjust as needed to roll today
New Net Debit: $17.32
Expiration Date: After the close on Friday, May 20
Potential Rate of Return: I am targeting breakeven for this position
DAL May Week Two (5/13) 40 Put
Current Stock Price: $37.10
Cash in Hand: $0.52
Action:
- Buy to close the DAL May Week Two (5/13) 40 Put for around $2.95
- Sell to open the DAL May Monthly (5/20) 40 Put for around $3.25
- Set your initial credit limit at $0.30, but adjust as needed to roll today
New Cash in Hand: $0.82
Expiration Date: After the close on Friday, May 20
Potential Rate of Return: 2.1% in 18 days, or 42% annualized, if this option expires worthless