I am recommending we roll our Bank of America (BAC), General Motors (GM) and Micron Technology (MU) calls.
With BAC, I am recommending we spend a little cash to capture another $0.50 in potential appreciation.
With GM and MU, we are taking a different approach. I am recommending we roll to significantly lower strike prices and keep the same expiration date. The goal is to have our shares called away so we can start selling puts on these stocks again.
We will be carrying over our net debits on the positions and continuing to work our way back toward breakeven.
BAC Aug Monthly (8/20) 39.50 Call
Current Stock Price: $41.20
Cost Basis: $41.25
Action:
- Buy to close the BAC Aug Monthly (8/20) 39.50 Call for around $1.75
- Sell to open the BAC Aug Week Four (8/27) 40 Call for around $1.50
- Set your initial debit limit at $0.25, but adjust as needed to roll today
New Cost Basis: $41
Expiration: After the close on Friday, Aug. 27
Potential Rate of Return: I am targeting breakeven for this position
GM Aug Monthly (8/20) 55 Call
Current Stock Price: $51.15
Cost Basis: $56.16
Action:
- Buy to close the GM Aug Monthly (8/20) 55 Call for around $0.03
- Sell to open the GM Aug Monthly (8/20) 51 Call for around $0.65
- Set your initial credit limit at $0.62, but adjust as needed to roll today
New Cost Basis: $55.54
Expiration: After the close on Friday, Aug. 20
Potential Rate of Return: I am targeting breakeven for this position
MU Aug Monthly (8/20) 79 Call
Current Stock Price: $71.38
Cost Basis: $81.89
Action:
- Buy to close the MU Aug Monthly (8/20) 79 Call for around $0.02
- Sell to open the MU Aug Monthly (8/20) 71 Call for around $0.99
- Set your initial credit limit at $0.97, but adjust as needed to roll today
New Cost Basis: $80.92
Expiration: After the close on Friday, Aug. 20
Potential Rate of Return: I am targeting breakeven for this position