I am recommending we roll our General Motors (GM), Marvell Technology (MRVL) and Pfizer (PFE) puts out two weeks to generate more income and reduce our net debits on the positions.
While we will be carrying large net debits into the new year on these core positions, I remain bullish on the long-term fundamentals of each. Additionally, they all throw off attractive rates of return for selling short-term options. Until either of these things changes, we will continue to trade them.
Given that all the puts are currently in the money, these trades are only recommended for members who are already in the positions. If you are not in these core positions, I will alert you when it is a good time to enter them in 2023.
GM Dec Week Four (12/23) 38 Put
Current Stock Price: $35.78
Net Debit: $9.69
Action:
- Buy to close the GM Dec Week Four (12/23) 38 Put for around $2.21
- Sell to open the GM Jan Week One (1/6) 38 Put for around $2.38
- Set your initial credit limit at $0.17, but adjust as needed to roll today
New Net Debit: $9.52
Expiration: After the close on Friday, Jan. 6
Potential Rate of Return: I am targeting breakeven for this position
MRVL Dec Week Four (12/23) 40 Put
Current Stock Price: $38.72
Net Debit: $17.86
Action:
- Buy to close the MRVL Dec Week Four (12/23) 40 Put for around $1.43
- Sell to open the MRVL Jan Week One (1/6) 40 Put for around $2.23
- Set your initial credit limit at $0.80, but adjust as needed to roll today
New Net Debit: $17.06
Expiration: After the close on Friday, Jan. 6
Potential Rate of Return: I am targeting breakeven for this position
PFE Dec Week Four (12/23) 53 Put
Current Stock Price: $51.78
Net Debit: $7.83
Action:
- Buy to close the PFE Dec Week Four (12/23) 53 Put for around $1.25
- Sell to open the PFE Jan Week One (1/6) 53 Put for around $1.55
- Set your initial credit limit at $0.30, but adjust as needed to roll today
New Net Debit: $7.53
Expiration: After the close on Friday, Jan. 6
Potential Rate of Return: I am targeting breakeven for this position