I am recommending we roll our Marvell Technology (MRVL) and Charles Schwab (SCHW) puts out two weeks to buy ourselves some time for the underlying stocks to move higher and to generate more income.
With core stock MRVL, you can enter the second leg of today’s trade even if you were not in the previous one. Just be aware that we will be managing and tracking it based on the ongoing position.
Please do not put new money to work in SCHW at this time. However, for those in the trade, note that with this roll our net debit has flipped to cash in hand. I hope to exit the position soon.
MRVL Sep Week Five (9/30) 45 Put
Current Stock Price: $43.91
Net Debit: $18.86
Action:
- Buy to close the MRVL Sep Week Five (9/30) 45 Put for around $1.56
- Sell to open the MRVL Oct Week Two (10/14) 45 Put for around $2.83
- Set your initial credit limit at $1.27 but adjust as needed to roll today
New Net Debit: $17.59
Expiration: After the close on Friday, Oct. 14
Potential Rate of Return: I am targeting breakeven for this position.
SCHW Sep Week Five (9/30) 70 Put
Current Stock Price: $72.57
Net Debit: $0.88
Action:
- Buy to close the SCHW Sep Week Five (9/30) 70 Put for around $0.31
- Sell to open the SCHW Oct Week Two (10/14) 70 Put for around $1.45
- Set your initial credit limit at $1.14, but adjust as needed to roll today
New Cash in Hand: $0.26
Expiration: After the close on Friday, Oct. 14
Potential Rate of Return: 0.4% in 179 days, or 1% annualized, if this option expires worthless