I am recommending we roll our General Motors (GM) and Marvell Technology (MRVL) puts to higher strike prices while keeping the expiration date the same. The income we generate will reduce our net debits on the positions.
The new strikes are close to the money, and it is possible we will accept shares on one or both of these core positions if the underlying stocks are below their respective strike prices at expiration. Therefore, these recommendations are only for members already in the positions.
GM Aug Week One (8/5) 34.50 Put
Current Stock Price: $36.88
Net Debit: $12.29
Action:
- Buy to close the GM Aug Week One (8/5) 34.50 Put for around $0.06
- Sell to open the GM Aug Week One (8/5) 36 Put for around $0.27
- Set your initial credit limit at $0.21, but adjust as needed to roll today
New Net Debit: $12.08
Expiration: After the close on Friday, Aug. 5
Potential Rate of Return: I am targeting breakeven for this position
MRVL Aug Week One (8/5) 51 Put
Current Stock Price: $55.99
Net Debit: $19.75
Action:
- Buy to close the MRVL Aug Week One (8/5) 51 Put for around $0.11
- Sell to open the MRVL Aug Week One (8/5) 55 Put for around $0.73
- Set your initial credit limit at $0.62 but adjust as needed to roll today
New Net Debit: $19.13
Expiration: After the close on Friday, Aug. 5
Potential Rate of Return: I am targeting breakeven for this position