We were assigned shares of General Motors (GM) last week, and it’s time to sell a call to reduce our cost basis on the position.
GM is a core stock that we will trade with great frequency. Therefore, if you were not in the previous trade but would like to enter one today, you can do so. Just be sure to buy 100 shares of the stock first for every call you plan to sell. Just be aware that we will be tracking and managing the trade based on the ongoing position.
Current Stock Price: $49.32
Cost Basis: $55.75
Action: Sell to open the GM Feb Monthly (2/18) 50 Call
Current Option Price: $0.53-$0.56
Recommended Limit: Set your initial limit order at $0.54, but adjust as needed to sell a call today
New Cost Basis: $55.21
Expiration: After the close on Friday, Feb. 18
Potential Rate of Return: I am targeting breakeven for this position