I am recommending we roll our Corning (GLW) put to buy ourselves some more time and generate additional income.
I also want to roll our General Motors (GM) and Micron Technology (MU) puts. These are recovery positions, and the income we generate from rolling will reduce our net debits as we work our way toward breakeven.
GLW Oct Week Five (10/29) 37 Put
Current Stock Price: $35.73
Cash in Hand: $0.78
Action:
- Buy to close the GLW Oct Week Five (10/29) 37 Put for around $1.34
- Sell to open the GLW Nov Monthly (11/19) 37 Put for around $1.78
- Set initial credit limit at $0.44, but adjust as needed to roll today
New Cash in Hand: $1.22
Expiration: After the close on Friday, Nov. 19
Potential Rate of Return: 3.3% in 25 days, or 48% annualized basis, if this option expires worthless
GM Oct Week Five (10/29) 54 Put
Current Stock Price: $55.32
Net Debit: $1.97
Action:
- Buy to close the GM Oct Week Five (10/29) 54 Put for around $0.10
- Sell to open the GM Nov Week One (11/5) 54 Put for around $0.47
- Set initial credit limit at $0.37, but adjust as needed to roll today
New Net Debit: $1.60
Expiration: After the close on Friday, Nov. 5
Potential Rate of Return: I am targeting breakeven for this position
MU Oct Week Five (10/29) 71 Put
Current Stock Price: $69.76
Net Debit: $5.03
Action:
- Buy to close the MU Oct Week Five (10/29) 71 Put for around $1.42
- Sell to open the MU Nov Week One (11/5) 71 Put for around $2
- Set initial credit limit at $0.58, but adjust as needed to roll today
New Net Debit: $4.45
Expiration: After the close on Friday, Nov. 5
Potential Rate of Return: I am targeting breakeven for this position