I am recommending we roll our First Solar (FSLR) and General Motors (GM) puts to avoid assignment and buy ourselves some time for the stocks to move higher.
Clean energy stocks were hit hard this week, but I believe the sell-off will be short-lived and a rebound will ensue. Both FSLR and GM have strong fundamentals, so we are sticking with them.
FSLR Jul Monthly (7/16) 91 Put
Current Stock Price: $84.63
Cash in Hand: $0.65
Action:
- Buy to close the FSLR Jul Monthly (7/16) 91 Put for around $6.45
- Sell to open the FSLR Jul Week Four (7/23) 91 Put for around $6.60
- Set your initial credit limit at $0.15, but adjust as needed to roll today
New Cash in Hand: $0.80
Expiration: After the close on Friday, July 23
Potential Rate of Return: 0.9% in 11 days, or 29% annualized, if this option expires worthless
GM Jul Monthly (7/16) 60 Put
Current Stock Price: $56.24
Cash in Hand: $1.95
Action:
- Buy to close the GM Jul Monthly (7/16) 60 Put for around $3.78
- Sell to open the GM Jul Week Four (7/23) 60 Put for around $3.85
- Set your initial credit limit at $0.07, but adjust as needed to roll today
New Cash in Hand: $2.02
Expiration: After the close on Friday, July 23
Potential Rate of Return: 3.4% in 25 days, or 49% annualized, if this option expires worthless