I am recommending we roll our Pfizer (PFE) call to generate more income and reduce our cost basis on the position. We are going out two weeks due to next week’s Federal Reserve meeting. While the Fed is widely expected to raise rates 0.75%, the market could move sharply in either direction based on the actual size of the rate hike or the Fed’s choice of language.
PFE is dirt-cheap compared to the market and the pharmaceutical sector. We will continue to trade this core stock for income and potential appreciation.
Current Stock Price: $45.90
Cost Basis: $56
- Buy to close the PFE Sep Monthly (9/16) 47 Call for around $0.13
- Sell to open the PFE Sep Week Five (9/30) 47 Call for around $0.64
- Set your initial credit limit at $0.51, but adjust as needed to roll today
New Cost Basis: $55.49
Expiration: After the close on Friday, Sept. 30
Potential Rate of Return: I am targeting breakeven for this position