I am recommending we roll our United Airlines (UAL) put out one week to avoid assignment and buy some time for shares to move higher. We will also pick up some more cash.
This week’s broader market sell-off overshadowed positive news in the sector. I expect this to be a short-term move and for a rebound to ensue.
Current Stock Price: $38.33
Cash in Hand: $0.31
- Buy to close the UAL Dec Monthly (12/16) 39.50 Put for around $1.23
- Sell to open the UAL Dec Week Four (12/23) 39.50 Put for around $1.64
- Set your initial credit limit at $0.41, but adjust as needed to roll today
New Cash in Hand: $0.72
Expiration: After the close on Friday, Dec. 23
Potential Rate of Return: 1.8% in 11 days, or 60% annualized, if this option expires worthless