I am recommending we roll our CVS Health (CVS) and Micron Technology (MU) calls up to higher strikes. While we will have to spend a little cash to do so, we will be capturing more potential appreciation.
Our Intel (INTC) call is deep in the money. I am recommending we allow our shares to be called away. We will continue the position by selling a put after earnings are announced next week, carrying over our net debit.
CVS Oct Monthly (10/16) 58 Call
Current Stock Price: $59.33
Cost Basis: $61.67
Action:
- Buy to close the CVS Oct Monthly (10/16) 58 Call for around $1.34
- Sell to open the CVS Oct Week Five (10/30) 59 Call for around $1.12
- Set your initial debit limit at $0.22, but adjust as needed to roll today
New Cost Basis: $61.89
Expiration: After the close on Friday, Oct. 30
Potential Rate of Return: I am targeting breakeven for this position
INTC Oct Monthly (10/16) 50.50 Call
Current Stock Price: $54.39
Cost Basis: $58.07
Action: Allow shares to be called away
Net Debit: $7.57
MU Oct Monthly (10/16) 50 Call
Current Stock Price: $52.12
Cost Basis: $51.21
Action:
- Buy to close the MU Oct Monthly (10/16) 50 Call for around $2.16
- Sell to open the MU Oct Week Five (10/30) 51 Call for around $2.12
- Set your initial debit limit at $0.04, but adjust as needed to roll today
New Cost Basis: $51.25
Expiration: After the close on Friday, Oct. 30
Potential Rate of Return: I am targeting breakeven for this position