We have a number of positions set to expire this week, and with markets selling off today on the escalating coronavirus outbreak, I want to get a jump on managing some of them.
As a quick note, I believe today’s sell-off is an overreaction, but Mr. Market sets the price even when he is being irrational. No worries. We have the tools and tactics needed to manage positions through downdrafts.
Halliburton (HAL) shares continued to struggle this week, so we will be rolling out one week to buy ourselves more time for shares to reverse higher.
I am also recommending we close our Foot Locker (FL) and Roku (ROKU) put positions. We are sitting on profit in each, and I don’t want to risk seeing these positions go into the red. It certainly feels good to take profits in a week like this!
Note that we also have a Nike (NKE) call set to expire this week, but I plan to wait until tomorrow to manage that position. My hope is that we’ll see a bounce in shares heading into the weekend.
FL Jan Week Five (1/31) 39 Put
Current Stock Price: $38.96
Cashin Hand: $0.55
Action: Buy to close the FL Jan Week Five (1/31) 39 Put for around $0.35, but adjust as needed to close today
Profit: $0.20, or $20 per contract
HAL Jan Week Five (1/31) 24 Put
Current Stock Price: $21.40
Cash in Hand: $0.34
Action:
- Buy to close the HAL Jan Week Five (1/31) 24 Put for around $2.60
- Sell to open the HAL Feb Week One (2/7) 24 Put for around $2.60
- Set your initial credit limit at $0, but adjust as needed to roll today
New Cash in Hand: $0.34
ROKU Jan Week Five (1/31) 122 Put
Current Stock Price: $128.55
Cash in Hand: $0.86
Action: Buy to close the ROKU Jan Week Five (1/31) 122 Put for around $0.10, but adjust as needed to close today
Profit: $0.76, or $76 per contract