Ford (F) is falling today, so I am recommending we book profits now.
Twitter (TWTR) sold off sharply following news of CEO Jack Dorsey’s resignation, pushing shares well below the strike price of the put we sold.
I am recommending we accept shares. The plan is to sell calls for a week or two to generate some more income. But we may end up walking away before we get back to breakeven. Dorsey’s departure marks a fundamental change for the company, and it will likely take two or more earnings announcements for Wall Street to regain interest in the stock. I don’t plan on tying up our capital for that long.
F Dec Week One (12/3) 19 Put
Current Stock Price: $19.42
Cash in Hand: $0.22
Action: Buy to close the F Dec Week One (12/3) 19 Put
Current Option Price: $0.04-$0.05
Recommended Limit: Set your initial limit order at $0.05, but adjust as needed to close today
Profit: $0.17, or $17 per contract
Rate of Return: 0.9% in 11 days, or 30% on an annualized basis
TWTR Dec Week One (12/3) 50 Put
Current Stock Price: $41.38
Cash in Hand: $0.10
Action: Accept shares
Cost Basis: $49.90
Rate of Return: I am targeting breakeven for this position