Let’s close our General Motors (GM) put. The company is scheduled to report earnings next week and I do not want to hold a position through the announcement. I will recommend a new put to sell to reduce our net debit once we see how the Street reacts to earnings.
I am also recommending we book profits on our Walgreens Boots Alliance (WBA) put.
GM Oct Week Four (10/22) 57 Put
Current Stock Price: $58.08
Net Debit: $2.17
Action: Buy to close the GM Oct Week Four (10/22) 57 Put
Current Option Price: $0.12-$0.13
Recommended Limit: Set your initial limit order at $0.13, but adjust as needed to close today
New Net Debit: $2.30
Potential Rate of Return: I am targeting breakeven for this position
WBA Oct Week Four (10/22) 47.50 Put
Current Stock Price: $49.06
Cash in Hand: $0.34
Action: Buy to close the WBA Oct Week Four (10/22) 47.50 Put
Current Option Price: $0.02-$0.03
Recommended Limit: Set your initial limit order at $0.03, but adjust as needed to close today
Profit: $0.31, or $31 per contract
Rate of Return: 0.7% in three days, or 79% on an annualized basis