I am recommending we roll our Citigroup (C) and General Motors (GM) puts to generate more income from these core Options Income Blueprint stocks.
The premiums are excellent right now, and the income we generate will reduce our net debit on the Citigroup position and push our potential annualized return for GM close to 70%
If you are not currently in the Citi position, you can enter today by selling the Jan. 28 put. Just be aware that we will be tracking and managing it based on the ongoing position.
Since the GM roll is to an in-the-money put, I do not recommend you enter the trade now if you are not already in the position.
C Jan Monthly (1/21) 65 Put
Current Stock Price: $65.05
Net Debit: $5.32
Action:
- Buy to close the C Jan Monthly (1/21) 65 Put for around $0.48
- Sell to open the C Jan Week Four (1/28) 65 Put for around $1.06
- Set your initial credit limit at $0.58, but adjust as needed to roll today
New Net Debit: $4.74
Expiration: After the close on Friday, Jan. 28
Potential Rate of Return: I am targeting breakeven for this position
GM Jan Monthly (1/21) 57.50 Put
Current Stock Price: $56.91
Cash in Hand: $0.45
Action:
- Buy to close the GM Jan Monthly (1/21) 57.50 Put for around $0.96
- Sell to open the GM Jan Week Four (1/28) 57.50 Put for around $1.70
- Set your initial credit limit at $0.74, but adjust as needed to roll today
New Cash in Hand: $1.19
Expiration: After the close on Friday, Jan. 28
Potential Rate of Return: 2.1% in 11 days, or 69% annualized, if this option expires worthless