I am recommending we close our Delta Air Lines (DAL) put with a small loss. As I said when we put on the position, I want to trade airline stocks anecdotally rather than for the long term. This is due to my belief that the stocks in this sector are fairly to overvalued based on slowing demand and falling ticket prices.
Rolling the position has allowed us to walk away with a smaller loss than we otherwise would have. But given that I see $30 as the new support level, I’d rather close now than roll again.
Current Stock Price: $32.07
Cash in Hand: $0.24
Action: Buy to close the DAL Sep Week Two (9/9) 32 Put
Current Option Price: $0.30-$0.34
Recommended Limit: Set your initial limit order at $0.32, but adjust as needed to close today
Loss $0.08, or $8 per contract
Rate of Return: 0.3% in 22 days, or 4% on an annualized basis