General Motors (GM) sold off with the broader market this week. I am recommending we roll our call out one week and to a lower strike to generate more income and reduce our cost basis on the position.
Note that earnings are expected to be released on Oct. 25. We may temporarily exit the position ahead of the announcement depending on how the stock is trading to avoid earnings risk.
Current Stock Price: $31.81
Cost Basis: $47.38
- Buy to close the GM Oct Week Two (10/14) 36 Call for around $0.03
- Sell to open the GM Oct Monthly (10/21) 34 Call for around $0.45
- Set your initial credit limit at $0.42, but adjust as needed to roll today
New Cost Basis: $46.96
Expiration Date: After the close on Friday, Oct. 21
Potential Rate of Return: I am targeting breakeven for the position