We have positions in Chewy (CHWY), General Motors (GM) and Micron Technology (MU) expiring today
I am recommending we roll our CHWY put out one week to avoid potential assignment and collect another big chunk of cash.
With our GM and MU calls, I am recommending we again roll to lower strike prices while keeping the same expiration date. This will result in our shares being called away so we can start selling puts on these stocks again to work our way toward breakeven on the positions.
CHWY Aug Monthly (8/20) 88 Put
Current Stock Price: $88.44
Cash in Hand: $0.56
Action:
- Buy to close the CHWY Aug Monthly (8/20) 88 Put for around $0.40
- Sell to open the CHWY Aug Week Four (8/27) 85 Put for around $1.11
- Set your initial credit limit at $0.71, but adjust as needed to roll today
New Cash in Hand: $1.27
Expiration: After the close on Friday, Aug. 24
Potential Rate of Return: 1.5% in 11 days, or 50% annualized, if this option expires worthless
GM Aug Monthly (8/20) 51 Call
Current Stock Price: $48.43
Cost Basis: $55.54
Action:
- Buy to close the GM Aug Monthly (8/20) 51 Call for around $0.01
- Sell to open the GM Aug Monthly (8/20) 48 Call for around $0.55
- Set your initial credit limit at $0.54, but adjust as needed to roll today
New Cost Basis: $55
Expiration: After the close on Friday, Aug. 20
Potential Rate of Return: I am targeting breakeven for this position.
MU Aug Monthly (8/20) 71 Call
Current Stock Price: $70.21
Cost Basis: $80.92
Action:
- Buy to close the MU Aug Monthly (8/20) 71 Call for around $0.09
- Sell to open the MU Aug Monthly (8/20) 70 Call for around $0.41
- Set your initial credit limit at $0.32, but adjust as needed to roll today
New Cost Basis: $80.60
Expiration: After the close on Friday, Aug. 20
Potential Rate of Return: I am targeting breakeven for this position