I am recommending we roll our Bank of America (BAC) and Micron Technology (MU) calls down and out two weeks. This will allow us to generate income and reduce our cost basis on the positions.
BAC Jul Week Four (7/23) 39.50 Call
Current Stock Price: $37.95
Cost Basis: $41.90
Action:
- Buy to close the BAC Jul Week Four (7/23) 39.50 Call for around $0.03
- Sell to open the BAC Aug Week One (8/6) 39 Call for around $0.38
- Set your initial credit limit at $0.35, but adjust as needed to roll today
New Cost Basis: $41.55
Expiration: After the close on Friday, Aug. 6
Potential Rate of Return: I am targeting breakeven for this position
MU Jul Week Four (7/23) 80 Call
Current Stock Price: $75.20
Cost Basis: $82.68
Action:
- Buy to close the MU Jul Week Four (7/23) 80 Call for around $0.03
- Sell to open the MU Aug Week One (8/6) 78 Call for around $0.82
- Set your initial credit limit at $0.79, but adjust as needed to roll today
New Cost Basis: $81.89
Expiration: After the close on Friday, Aug. 6
Potential Rate of Return: I am targeting breakeven for this position