I am recommending we roll our Apple (AAPL), Chewy (CHWY) and Starbucks (SBUX) calls out one week.
Our positions have been hit as money rotated out of growth stocks and into industrials and consumer staples, but I do not expect this trend to last long. In the meantime, we’ll continue to generate income by selling options.
Chewy is expected to announce earnings next week, and while I typically avoid earnings, I am recommending we hold through the announcement. We will be selling a well-out-of-the-money call in case shares take off after earnings.
Because of the added earning risk, though, if you are not currently in a CHWY position, please sit this one out. I will alert you when it is time to put new money to work.
However, you can enter AAPL and SBUX calls today if you do not have current positions in those stocks. Just be sure to buy 100 shares of the underlying stock first for every call you plan to sell to make sure your position is covered. Never sell an uncovered call.
Note that no action is needed on the Corning (GLW) Apr Week One (4/1) 41 Put at this time. And since we are managing all of our expiring positions today, I will not be sending a PIPC Update tomorrow.
AAPL Mar Week Four (3/26) 125 Call
Current Stock Price: $120.01
Action:
- Buy to close the AAPL Mar Week Four (3/26) 125 Call for around $0.04
- Sell to open the AAPL Apr Week Two (4/9) 125 Call for around $1.03
- Set your initial credit limit at $0.99, but adjust as needed to roll today
CHWY Mar Week Four (3/26) 90 Call
Current Stock Price: $78.27
Action:
- Buy to close the CHWY Mar Week Four (3/26) 90 Call for around $0.02
- Sell to open the CHWY Apr Week One (4/1) 85 Call for around $2.01
- Set your initial credit limit at $1.99, but adjust as needed to roll today
SBUX Mar Week Four (3/26) 108 Call
Current Stock Price: $106.21
Action:
- Buy to close the SBUX Mar Week Four (3/26) 108 Call for around $0.15
- Sell to open the SBUX Apr Week One (4/1) 107 Call for around $1.07
- Set your initial credit limit at $0.92, but adjust as needed to roll today
Disclosure: I have positions or trade in and out of AAPL, CHWY, GLW and SBUX.