I am recommending a call to sell against our uncovered CVS Health (CVS) shares. Note that this position is only for people who already own shares from a previous trade.
Peloton Interactive (PTON) is roaring back today after a sharp sell-off earlier this week. Let’s book a profit on this volatile stock now rather than risk holding through expiration.
CVS Uncovered Shares
Current Stock Price: $56.88
Cost Basis: $62.93
Action: Sell to open the CVS Oct Week One (10/2) 57 Call
Current Option Price: $0.87-$0.95
Recommended Limit: Set your initial limit order at $0.91, but adjust as needed to close today
New Cost Basis: $62.02
Expiration: After the close on Friday, Oct. 2
Potential Rate of Return: I am targeting breakeven for this position
PTON Sep Week Four (9/25) 90 Put
Current Stock Price: $94.36
Cash in Hand: $0.72
Action: Buy to close the PTON Sep Week Four (9/25) 90 Put
Current Option Price: $0.10-$0.13
Recommended Limit: Set your initial limit order at $0.12, but adjust as needed to close today
Profit: $0.60, or $60 per contract
Rate of Return: 0.7% in four days, or 61% on an annualized basis