Micron Technology (MU) is expected to announce earnings after the close today. Our put position is underwater, but I do not want to expose ourselves to earnings risk. Therefore, I am recommending we close the position now. We will incur a net debit that we will carry over when I recommend another put to sell after the announcement.
I am also recommending we roll our Twitter (TWTR) call out one week to bring in more income and reduce our cost basis.
MU Apr Week One (4/1) 90 Put
Current Stock Price: $87.56
Cash in Hand: $3.27
Action: Buy to close the MU Apr Week One (4/1) 90 Put
Current Option Price: $3.60-$3.80
Recommended Limit: Set your initial limit order at $3.70, but adjust as needed to close today
Net Debit: $0.43
Potential Rate of Return: I am targeting breakeven for this position
TWTR Apr Week One (4/1) 67.50 Call
Current Stock Price: $64.75
Cost Basis: $66.86
Action:
- Buy to close the TWTR Apr Week One (4/1) 67.50 Call for around $0.12
- Sell to open the TWTR Apr Week Two (4/9) 67.50 Call for around $0.74
- Set your initial credit limit at $0.62, but adjust as needed to roll today
New Cost Basis: $66.24
Expiration: After the close on Friday, April 9
Potential Rate of Return: 1.7% in 53 days, or 12% annualized, if shares are called away