January Expiration
2022 has gotten off to a rough start for the bulls as growth stocks have gone through a mini-crash, and of late the selling has moved to the rest of the market. Whether this is the start of a real market correction, or simply a normal pullback, is anyone’s guess. Regardless, because we are selling calls to lower our breakeven on our stock purchases, the Profit Booster portfolio has held up much better than the overall market.
Let’s dive into our positions that are expiring today, with the headline being you don’t need to act on any of these trades today, and we will simply play them out through the expiration process.
Let’s begin with our Goodyear Tire (GT) covered call. We have sold two sets of calls against our stock holding, with the latest being the January 22 calls for $0.65.
Today the stock is trading right at our ideal spot of 22. My plan is to simply let this position play itself out. If GT closes above 22 today, we will walk away from our position with a small profit. If GT closes below 22 today, I will evaluate how I want to manage this position Monday/Tuesday morning (perhaps sell yet another call).
Moving on to PureStorage (PSTG). Last month we bought stock at 33.15 and sold the January 33 call for $2.25.
Today the stock is trading at 26. My plan is to simply let this position play itself out, and come Monday or Tuesday morning, once our short call has expired, we will likely (though not guaranteed) sell our stock position.
Next up is Ciena (CIEN). Last month we bought the stock at 74.2 and sold the January 75 call for $2.50.
Today the stock is trading at 66, which means the call we sold will expire worthless. My plan is to simply let this position expire today, and come Monday/Tuesday I will decide if we will sell our stock, or sell a new call.
Alcoa (AA) is the last stock we will discuss. We bought the stock at 55.25 and sold the January 55 call for $4.25.
Today the stock is trading at 58, which means it’s likely we will walk away with our full profit today, and come Monday we will no longer own an AA stock or option position.