I am recommending we roll our Marvell Technology (MRVL) and Pfizer (PFE) calls out two weeks to generate more cash and reduce our cost basis on the positions.
MRVL has outperformed the broader market over the past week. We are rolling our call up to capture more potential appreciation in shares in addition to income.
Pfizer, on the other hand, has sold off over the past week despite the rally in the broader market. With the company scheduled to announce earnings on Jan. 31, we are rolling our call down with the goal of getting called out of shares to avoid earnings risk. We will reenter the position once we see how the market responds to Pfizer’s results.
MRVL Jan Week Two (1/13) 37.50 Call
Current Stock Price: $38.74
Cost Basis: $56.40
Action:
- Buy to close the MRVL Jan Week Two (1/13) 37.50 Call for around $1.40
- Sell to open the MRVL Jan Week Four (1/27) 38 Call for around $2
- Set your initial credit limit at $0.60, but adjust as needed to roll today
New Cost Basis: $55.80
Expiration: After the close on Friday, Jan. 27
Potential Rate of Return: I am targeting breakeven for the position
PFE Jan Week Two (1/13) 49 Call
Current Stock Price: $46.95
Cost Basis: 60.27
Action:
- Buy to close the PFE Jan Week Two (1/13) 49 Call for around $0.01
- Sell to open the PFE Jan Week Four (1/27) 48 Call for around $0.42
- Set your initial credit limit at $0.41, but adjust as needed to roll today
New Cost Basis: $59.86
Expiration: After the close on Friday, Jan. 27
Potential Rate of Return: I am targeting breakeven for the position