I am recommending we roll our Delta Air Lines (DAL) put out one week and to a lower strike to avoid assignment and buy ourselves some time for the stock to recover. We will be giving back some cash to do so, but we are reducing our exposure with the lower strike price.
I am also recommending we roll our Marvell Technology (MRVL) put out two weeks and to a lower strike to generate more income and reduce our net debit on the position.
DAL Sep Week One (9/2) 32.50 Put
Current Stock Price: $30.44
Cash in Hand: $0.44
Action:
- Buy to close the DAL Sep Week One (9/2) 32.50 Put for around $2.15
- Sell to open the DAL Sep Week Two (9/9) 32 Put for around $1.95
- Set your initial debit limit at $0.20, but adjust as needed to roll today
New Cash in Hand: $0.24
Expiration: After the close on Friday, Sept. 9
Potential Rate of Return: 0.8% in 23 days, or 12% annualized, if this option expires worthless
MRVL Sep Week One (9/2) 46 Put
Current Stock Price: $44.78
Net Debit: $20.30
Action:
- Buy to close the MRVL Sep Week One (9/2) 46 Put for around $1.61
- Sell to open the MRVL Sep Monthly (9/16) 45 Put for around $2.26
- Set your initial credit limit at $0.65, but adjust as needed to roll today
New Net Debit: $19.65
Expiration: After the close on Friday, Sept. 16
Potential Rate of Return: I am targeting breakeven for this trade