We have positions in Bank of America (BAC), General Motors (GM), Marvell Technology Group (MRVL), Micron Technology (MU) and Twitter (TWTR) expiring this week.
I am disappointed BAC did not move higher this week after the bank said it will increase its quarterly dividend. I am recommending we accept shares tomorrow and will sell a call against them soon.
GM is holding in a tight trading range of $58-$60. Let’s roll our put to a higher strike to generate more cash.
I am also recommending we roll our MRVL put. However, we may be moving on from this position soon. MRVL options have become difficult to trade due to liquidity issues that are resulting in wider bid/ask spreads.
MU is falling sharply today despite the company reporting better-than-expected earnings and raising its forecast. Let’s roll our call out two weeks to take advantage of elevated option premiums.
Finally, I am recommending we book profits on Twitter (TWTR).
BAC Jul Week One (7/2) 43.50 Put
Current Stock Price: $41.30
Cash in Hand: $1.16
Action: Accept shares
Cost Basis: $42.34
GM Jul Week One (7/2) 59 Put
Current Stock Price: $59.50
Cash in Hand: $0.64
Action:
- Buy to close the GM Jul Week One (7/2) 59 Put for around $0.22
- Sell to open the GM Jul Week Two (7/9) 60 Put for around $1.17
- Set your initial credit limit at $0.95, but adjust as needed to roll today
New Cash in Hand: $1.59
Expiration: After the close on Friday, July 9
Potential Rate of Return: 2.7% in 11 days, or 88% annualized, if this option expires worthless
MRVL Jul Week One (7/2) 55 Put
Current Stock Price: $57.30
Net Debit: $3.36
Action:
- Buy to close the MRVL Jul Week One (7/2) 55 Put for around $0.09
- Sell to open the MRVL Jul Monthly (7/16) 59 Put for around $2.17
- Set your initial credit limit at $2.08, but adjust as needed to roll today
New Net Debit: $1.28
Expiration: After the close on Friday, July 16
Potential Rate of Return: I am targeting breakeven for this position
MU Jul Week One (7/2) 84.50 Call
Current Stock Price: $80.82
Cost Basis: $84.40
Action:
- Buy to close the MU Jul Week One (7/2) 84.50 Call for around $0.16
- Sell to open the MU Jul Monthly (7/16) 83 Call for around $1.42
- Set your initial credit limit at $1.26, but adjust as needed to roll today
New Cost Basis: $83.14
Expiration: After the close on Friday, July 16
Potential Rate of Return: I am targeting breakeven for this position
TWTR Jul Week One (7/2) 67.50 Put
Current Stock Price: $68.86
Cash in Hand: $0.57
Action: Buy to close the TWTR Jul Week One (7/2) 67.50 Put for around $0.13, but adjust as needed to close today
Profit: $0.44, or $44 per contract
Rate of Return: 0.7% in three days, or 79% on an annualized basis