Our Halliburton (HAL) put that is set to expire today is in the money. There’s no need to fret, though, as we knew this was a possibility from the get-go.
To avoid having shares assigned to us, I am recommending we roll the put out one week — i.e., buying to close the current option and selling a new put with a later expiration date. This is a strategy I use often and with great success. Today’s roll will buy us time for the stock to move higher and bring in more income in the process.
The credit limit I specified below is for those completing the roll in one order. If your brokerage requires two orders, you should aim to generate that amount in net cash from the two trades. Also note that you may need to adjust the limit order to get the trade to go off. Be patient, but work your limits as necessary to complete the roll today.
Current Stock Price: $23.16
Cash in Hand: $0.21
- Buy to close the HAL Jan Week Four (1/24) 24 Put for around $0.86
- Sell to open the HAL Jan Week Five (1/31) 24 Put for around $0.99
- Set your initial credit limit at $0.13, but adjust as needed to roll today
New Cash in Hand: $0.34