We temporarily exited our General Motors (GM) and Pfizer (PFE) positions ahead of the companies’ earnings announcements to avoid any unnecessary risk.
GM shot up after reporting better-than-expected Q4 revenue and earnings and record profits for the full year. Moreover, management issued upbeat guidance for 2023 and announced it is buying a $650 million stake in Lithium Americas (LAC) to get access to the raw material needed to support production capacity of 1 million electric vehicles a year by 2025.
PFE reported a record $100 billion in profits for 2022. That included almost $57 billion from COVID-19 products. However, management forecast revenue will decline by as much as a third in 2023 — to a range of $67 billion to $71 billion — as demand for COVID-19 vaccines and antiviral treatments slows.
I think the stock’s relatively muted response to Pfizer’s announcement is a good sign.
With earnings out of the way, I am recommending we re-enter these core Options Income Blueprint stocks by selling puts. The income we generate will reduce our net debit on the positions.
You can enter today’s trades even if you were not in the previous ones. Just be aware that we will be managing and tracking them based on the ongoing positions.
General Motors (GM)
Current Stock Price: $41.41
Net Debit: $10.48
Action: Sell to open GM Feb Monthly (2/17) 40.50 Put
Current Option Price: $0.75-$0.78
Recommended Limit: Set your initial limit order at $0.76, but adjust as needed to sell a put today
New Net Debit: $9.72
Expiration: After the close on Friday, Feb. 17
Potential Rate of Return: I am targeting breakeven for this position
Pfizer (PFE)
Current Stock Price: $44.16
Net Debit: $15.80
Action: Sell to open PFE Feb Week Two (2/10) 44 Put
Current Option Price: $0.49-$0.52
Recommended Limit: Set your initial limit order at $0.50, but adjust as needed to sell a put today
New Net Debit: $15.30
Expiration: After the close on Friday, Feb. 10
Potential Rate of Return: I am targeting breakeven for this position