We have positions in Citigroup (C) and Lyft (LYFT) expiring today. Both are deep underwater following the worst first half of the year for stocks since 1970.
I do not want to take losses on one of the largest banks in the United States. I believe Wall Street’s concerns about the baking sector are overblown and that C is oversold.
That doesn’t mean it can’t go lower in the current market environment. However, we will be holding C for a long-term recovery while continuing to sell options for income.
Let’s accept shares and I will recommend a call to sell next week.
Lyft is a different story. The high-beta, high-multiple stock has been savaged, falling another 18% this week. If the market pops following its latest rout, LYFT could outperform in the short term. However, if the stock looks to be dead money over the next few weeks, we may exit the position at a loss and redeploy the remaining capital elsewhere.
Our LYFT call is on track to expire worthless. We will sell another one next week.
C July Week One (7/1) 50 Put
Current Stock Price: $46.15
Net Debit: $14.99
Action: Accept shares
Cost Basis: $64.99
Potential Rate of Return: I am targeting breakeven for this position
LYFT Jul Week One (7/1) 16 Call
Current Stock Price: $13.39
Cost Basis: $21.05
Action: Watch call expire worthless
Potential Rate of Return: I am targeting breakeven for this position