Our General Motors (GM) and Marvell Technology (MRVL) calls are in the money and on track to be called away following big moves up in the stocks this week. I will recommend puts to sell soon to reduce our net debits on the positions.
General Motors is expected to report earnings on Tuesday. We will wait until after the announcement to sell a put, thus avoiding earnings risk while taking advantage of still-elevated volatility levels.
Pfizer (PFE) is near our call’s strike. If the stock closes above $51, our shares will be called away and we will have a net debit on the position. If, however, the stock closes below $51, our call will expire worthless. In this case, we will sell the shares before the company reports earnings on Thursday. In either case, we will re-enter the position by selling a put after the announcement.
GM Jul Week Four (7/22) 32 Call
Current Stock Price: $34.81
Cost Basis: $44.94
Action: Allow shares to be called away
Net Debit: $12.94
Potential Rate of Return: I am targeting breakeven for this position
MRVL Jul Week Four (7/22) 46 Call
Current Stock Price: $52.73
Cost Basis: $66.43
Action: Allow shares to be called away
New Net Debit: $20.43
Potential Rate of Return: I am targeting breakeven for this position
PFE Jul Week Four (7/22) 51 Call
Current Stock Price: $51.47
Cost Basis: $59.26
Action: Watch call expire
Net Debit (if called out): $8.26
Potential Rate of Return: I am targeting breakeven for this position