We closed our position in core stock General Motors (GM) ahead of the company’s earnings announcement. The automaker beat first-quarter earnings estimates and maintained its 2022 guidance despite a number of issues, including supply chain snags. Management also said it continues to ramp up electric vehicle production.
While the stock is roughly flat since the announcement, volatility is high, creating an excellent opportunity to sell a put. We are going out two weeks to capture a large chunk of cash.
You can enter today’s trade even if you were not in the previous one. Just be aware that we will be managing and tracking it based on the ongoing position.
Current Stock Price: $37.75
Net Debit: $12.58
Action: Sell to open the GM May Week Two (5/13) 37 Put
Current Option Price: $1.19-$1.24
Recommended Limit: Set your initial limit order at $1.21, but adjust as needed to sell a put today
New Net Debit: $11.37
Expiration: After the close on Friday, May 13
Potential Rate of Return: I am targeting breakeven for this position