I am recommending we roll our General Motors (GM), Micron Technology (MU) and Pfizer (PFE) puts out two weeks to buy ourselves some more time and generate additional income.
GM Aug Week Four (8/27) 49 Put
Current Stock Price: $48.83
Net Debit: $6.44
Action:
- Buy to close the GM Aug Week Four (8/27) 49 Put for around $0.51
- Sell to open the GM Sep Week Two (9/10) 49 Put for around $1.30
- Set your initial credit limit at $0.79, but adjust as needed to roll today
New Net Debit: $5.65
Expiration: After the close on Friday, Sept. 10
Potential Rate of Return: I am targeting breakeven for this position
MU Aug Week Four (8/27) 72 Put
Current Stock Price: $72.17
Net Debit: $9.74
Action:
- Buy to close the MU Aug Week Four (8/27) 72 Put for around $0.55
- Sell to open the MU Sep Week Two (9/10) 72 Put for around $1.76
- Set your initial credit limit at $1.21, but adjust as needed to roll today
New Net Debit: $8.53
Expiration: After the close on Friday, Sept. 10
Potential Rate of Return: I am targeting breakeven for this position
PFE Aug Week Four (8/27) 51 Put
Current Stock Price: $47.37
Cash in Hand: $2.15
Action:
- Buy to close the PFE Aug Week Four (8/27) 51 Put for around $3.63
- Sell to open the PFE Sep Week Two (9/10) 51 Put for around $3.85
- Set your initial credit limit at $0.22, but adjust as needed to roll today
New Cash in Hand: $2.37
Expiration: After the close on Friday, Sept. 10
Potential Rate of Return: 4.6% in 32 days, or 53% annualized, if this option expires worthless