I am recommending we roll our Citigroup (C) call out two weeks to generate more income and reduce our cost basis on the position.
Our Squarespace (SQSP) put is deep in the money following a two-day sell-off in the stock. Let’s accept shares and we will sell a call against them soon.
Finally, I am recommending we roll our Twitter (TWTR) puts to avoid assignment and buy time for shares to move higher. Since we’re rolling to a lower strike to reduce risk, we’ll need to give back a little cash.
C Nov Monthly (11/19) 69 Call
Current Stock Price: $66.09
Cost Basis: $69.30
Action:
- Buy to close the C Nov Monthly (11/19) 69 Call for around $0.02
- Sell to open the C Dec Week One (12/3) 68 Call for around $0.50
- Set your initial credit limit at $0.48, but adjust as needed to roll today
New Cost Basis: $68.82
Expiration: After the close on Friday, Dec. 3
Potential Rate of Return: I am targeting breakeven for this position
SQSP Nov Monthly (11/19) 45 Put
Current Stock Price: $39.28
Cash in Hand: $0.40
Action: Accept shares
Cost Basis: $44.60
Potential Rate of Return: I am targeting breakeven for this position
TWTR Nov Monthly (11/19) 51 Put
Current Stock Price: $49.66
Cash in Hand: $0.33
Action:
- Buy to close the TWTR Nov Monthly (11/19) 51 Put for around $1.39
- Sell to open the TWTR Dec Week One (12/3) 50 Put for around $1.16
- Set your initial debit limit at $0.23, but adjust as needed to roll today
New Cash in Hand: $0.10
Expiration: After the close on Friday, Dec. 3
Potential Rate of Return: 0.2% in 18 days, or 4% annualized, if this option expires worthless