Chewy (CHWY) finally broke above $70 and appears to be establishing a new, higher trading range. Rather than allow our shares to be called away, I am recommending we roll our call out one week and to a higher strike to pick up cash and more potential appreciation.
Note that the company is expected to report earnings on June 10. The stock is prone to big moves following earnings announcements. Therefore, the plan is to sit that week out and resume selling options once the dust settles.
If you are not in the CHWY position, please sit this trade out. I will alert you when it is time to put new money to work.
Current Stock Price: $74.23
- Buy to close the CHWY May Week Four (5/28) 72.50 Call for around $1.85
- Sell to open the CHWY Jun Week One (6/4) 73.50 Call for around $2.10
- Set your initial credit limit at $0.25, but adjust as needed to roll today
And here’s where we stand with our other Perpetual Income Portfolio Club positions heading into the weekend.
AAPL May Week Four (5/28) 128 Call
Apple (AAPL) has not been able to escae a very narrow trading range of $125 to $130. The sheer size of the stock’s market cap is exerting a downward pull on the shares every time the price nears $130.
Our call is on track to expire worthless and we will sell another one next week.
Current Stock Price: $125.05
Action: Watch call expire worthless
GM May Week Four (5/28) 57 Call
General Motors (GM) popped this week on news the company was reopening several factories it had closed due to a shortage of semiconductors. So much for management comments that the shortage would last well into the third quarter!
Our shares are on track to be called away and we will sell a put next week.
Current Stock Price: $59.19
Action: Allow shares to be called away
TWTR Jun Week One (6/4) 53.50 Call
Twitter (TWTR) has run away from us, which is frustrating given how the stock had been struggling for the past few weeks. But that is the risk we take trading volatile stocks.
Our call does not expire for another week and we may roll it to a higher strike before then.
Current Stock Price: $58.15
Action: No action is needed at this time
Disclosure: I have positions or trade in and out of AAPL, CHWY, GM and TWTR.