The market has been choppy lately with a downward bias due to concerns about interest rates and the spillover of those concerns from bond to equity markets. Fed Chair Jerome Powell is expected to reassure markets of the central bank’s commitment to its bond-buying program during his appearance at a Wall Street Journal webinar today.
The market does not appear to be pricing in a dramatic move from this announcement, so I want to get a jump on managing our positions that expire this week.
I am recommending we roll our Blackstone Group (BX), CVS Health (CVS) and Peloton Interactive (PTON) positions.
With the PTON positions, I am rolling to buy time and generate some cash in the process. But please note that it could take weeks and perhaps even months to get back to breakeven, particularly with the spread position.
BX Mar Week One (3/5) 70 Call
Current Stock Price: $68.88
Cost Basis: $69.60
Action:
- Buy to close the BX Mar Week One (3/5) 70 Call for around $0.20
- Sell to open the BX Mar Week Two (3/12) 70 Call for around $0.66
- Set initial credit limit at $0.46, but adjust as needed to roll today
New Cost Basis: $69.14
CVS Jan Monthly (1/21/22) 52.50/Mar Week One (3/5) 72.50 Call Spread
Note: No action is needed on the CVS Jan Monthly (1/21/22) 52.50 Call at this time.
Current Stock Price: $69.80
Cost Basis: $18.33
Action:
- Buy to close the CVS Mar Week One (3/5) 72.50 Call for around $0.03
- Sell to open the CVS Mar Week Two (3/12) 70 Call for around $1.05
- Set your initial credit limit at $1.02, but adjust as needed to roll today
New Cost Basis: $17.31
PTON Mar Week One (3/5) 125 Put
Current Stock Price: $108.89
Cash in Hand: $1.25
Action:
- Buy to close the PTON Mar Week One (3/5) 125 Put for around $16.90
- Sell to open the PTON Mar Monthly (3/19) 125 Put for around $17.60
- Set initial credit limit at $0.70, but adjust as needed to roll today
New Cash in Hand: $1.95
PTON Mar Week One (3/5) 125/115 Put Spread
Cash in Hand: $0.76
Action:
- Buy to close the PTON Mar Week One (3/5) 125 Put for around $16.90
- Sell to close the PTON Mar Week One (3/5) 115 Put for around $6.45
- Set initial debit limit at $10.45, but adjust as needed to close today
- Sell to open the PTON Mar Monthly (3/19) 90 Put for around $1.29
- Buy to open the PTON Mar Monthly (3/19) 80 Put for around $0.53
- Set initial credit limit at $0.76, but adjust as needed to open today
New Net Debit: $8.93