We have four put trades expiring this week on our core stocks: Citigroup (C), General Motors (GM), Marvell Technology (MRVL) and Pfizer (PFE).
I am recommending we roll them again rather than accept shares. This will buy us more time as we continue to generate income.
Pfizer is expected to report earnings next week. Currently, the plan is to hold through the announcement. However, depending on market conditions, there’s a chance we will temporarily close the position before earnings and trade it again after.
If you are not currently in the Citigroup trade and would like to enter today, you can sell the second leg. Please sit the other trades out.
C Feb Week One (2/4) 65 Put
Current Stock Price: $66.12
Net Debit: $3.86
Action:
- Buy to close the C Feb Week One (2/4) 65 Put for around $0.27
- Sell to open the C Feb Week Two (2/11) 65 Put for around $0.83
- Set your initial credit limit at $0.56, but adjust as needed to roll today
New Net Debit: $3.30
Expiration: After the close on Friday, Feb. 11
Potential Rate of Return: I am targeting breakeven for this position
GM Feb Week One (2/4) 57.50 Put
Current Stock Price: $53.13
Cash in Hand: $1.53
Action:
- Buy to close the GM Feb Week One (2/4) 57.50 Put for around $4.35
- Sell to open the GM Feb Week Two (2/11) 57.50 Put for around $4.57
- Set your initial credit limit at $0.22, but adjust as needed to roll today
New Cash in Hand: $1.75
Expiration: After the close on Friday, Feb. 11
Potential Rate of Return: 3% in 25 days, or 44% annualized, if this option expires worthless
MRVL Feb Week One (2/4) 76 Put
Current Stock Price: $71.20
Cash in Hand: $2.08
Action:
- Buy to close the MRVL Feb Week One (2/4) 76 Put for around $4.98
- Sell to open the MRVL Feb Week Two (2/11) 76 Put for around $5.55
- Set your initial credit limit at $0.57, but adjust as needed to roll today
New Cash in Hand: $2.65
Expiration: After the close on Friday, Feb. 11
Potential Rate of Return: 3.5% in 25 days, or 51% annualized, if this option expires worthless
PFE Feb Week One (2/4) 58 Put
Current Stock Price: $53.40
Cash in Hand: $0.78
Action:
- Buy to close the PFE Feb Week One (2/4) 58 Put for around $4.58
- Sell to open the PFE Feb Monthly (2/18) 58 Put for around $4.87
- Set your initial credit limit at $0.29, but adjust as needed to roll today
New Cash in Hand: $1.07
Expiration: After the close on Friday, Feb. 18
Potential Rate of Return: 1.8% in 193 days, or 3% annualized, if this option expires worthless