Devon Energy (DVN) has fallen in tandem with oil prices and our put is in the money despite today’s rally. I am recommending we roll our put out two weeks and to a lower strike price to avoid assignment and generate more income.
Be aware that I may decide to close this position at breakeven or a small loss if we get the chance.
Current Stock Price: $56.05
Cash in Hand: $0.51
- Buy to close the DVN Aug Week One (8/5) 58 Put for around $2
- Sell to open the DVN Aug Monthly (8/19) 57 Put for around $2.85
- Set your initial credit limit at $0.85, but adjust as needed to roll today
Cash in Hand: $1.36
Expiration: After the close on Friday, Aug. 19
Potential Rate of Return: 2.4% in 18 days, or 48% annualized, if this option expires worthless