I am recommending we roll our CVS Health (CVS) put to a lower strike to avoid assignment and collect more cash.
Let’s also roll our Intel (INTC) call to generate more income and lower out cost basis on the position.
CVS Aug Week Four (8/28) 64.50 Put
Current Stock Price: 63.21
Cash in Hand: $0.64
Action:
- Buy to close the CVS Aug Week Four (8/28) 64.50 Put for around $1.32
- Sell to open the CVS Sep Week Two (9/11) 64 Put for around $1.70
- Set your initial credit limit at $0.38, but adjust as needed to roll today
New Cash in Hand: $1.02
Expiration: After the close on Friday, Sept. 11
Potential Rate of Return: 1.6% in 18 days, or 32% on an annualized basis, if this option expires worthless
INTC Aug Week Four (8/28) 49 Call
Current Stock Price: $49.38
Cost Basis: $59.38
Action:
- Buy to close the INTC Aug Week Four (8/28) 49 Call for around $0.57
- Sell to open the INTC Sep Week Two (9/11) 49 Call for around $1.34
- Set your initial credit limit at $0.77, but adjust as needed to roll today
New Cost Basis: $58.61
Expiration: After the close on Friday, Sept. 11
Potential Rate of Return: I am targeting breakeven for this position