Both Marvell Technology (MRVL) and Sunrun (RUN) are up sharply today on continued optimism in the chip and green energy sectors. This is due predominately to the Democrats holding the Senate (meaning no significant changes to climate policy) and the potential for more positive relations with China following a meeting between President Joe Biden and Chinese leader Xi Jinping.
I am recommending we roll our MU call out two weeks and to a higher strike price to avoid having our shares called away. While we will need to spend some cash to do so, we will pick up an additional $1.50 in potential capital appreciation.
With RUN, we are rolling out to the December monthly expiration to generate more income and reduce our cost basis on the position.
MRVL Nov Monthly (11/18) 41.50 Call
Current Stock Price: $44.75
Cost Basis: $60.96
Action:
- Buy to close the MRVL Nov Monthly (11/18) 41.50 Call for around $3.55
- Sell to open the MRVL Dec Week One (12/2) 43 Call for around $3.85
- Set your initial debit limit at $0.30, but adjust as needed to roll today
New Cost Basis: $61.26
Expiration: After the close on Friday, Dec. 2
Potential Rate of Return: I am targeting breakeven for the position
RUN Nov Monthly (11/18) 35 Call
Current Stock Price: $31.80
Cost Basis: $43.56
Action:
- Buy to close the RUN Nov Monthly (11/18) 35 Call for around $0.24
- Sell to open the RUN Dec Monthly (12/16) 35 Call for around $1.79
- Set your initial credit limit at $1.55, but adjust as needed to roll today
New Cost Basis: $42.01
Expiration: After the close on Friday, Dec. 16
Potential Rate of Return: I am targeting breakeven for the position