I am recommending calls to sell against our uncovered shares of Citigroup (C) and Lyft (LYFT) to reduce our cost basis on the positions. Both stocks have fallen with the broader market this week, though LYFT’s sell-off has been much sharper.
Note that Citigroup is scheduled to announce earnings on July 15, the day our call expires. Prior to the announcement, we will either close the position or roll it out two to three weeks, depending on how the stock is trading, to mitigate earnings risk.
Note that these trades are only for members who already own shares of C and LYFT from previous positions.
C Uncovered Shares
Current Stock Price: $45.58
Cost Basis: $64.99
Action: Sell to open the C Jul Monthly (7/15) 47.50 Call
Current Option Price: $0.56-$0.58
Recommended Limit: Set your initial limit order at $0.57, but adjust as needed to sell a call today
New Cost Basis: $64.42
Expiration: After the close on Friday, July 15
Potential Rate of Return: I am targeting breakeven for this position
LYFT Uncovered Shares
Current Stock Price: $13.30
Cost Basis: $21.05
Action: Sell to open the LYFT July Monthly (7/15) 13.50 Call
Current Option Price: $0.57-$0.59
Recommended Limit: Set your initial limit order at $0.58, but adjust as needed to sell a call today
New Cost Basis: $20.47
Expiration: After the close on Friday, July 15
Potential Rate of Return: I am targeting breakeven for this position