We have 3 positions with calls expiring this Friday (23 Dec) that we can roll today ahead of the holidays.
AbbVie (ABBV): 161.72
AbbVie stock price has retreated recently and goes ex-dividend on 1/12 paying 1.46 per share … we don’t want to miss that.
But we are going to take a different approach. We are going to roll our 23 Dec 152.50 call up to the 6 Jan (23) 155 call and a pay a debit of around 1.75. Here’s why:
We add another 2.50 in capital gains ahead of likely getting called out of the stock on 1/6/23. When called out, we still end up with 0.75 of net credit in the trade (2.50 – 1.75) … better than if we rolled our call out to the same 152.50 strike and collected only 0.50.
And who knows, maybe AbbVie stock sell off enough in the first week of the New Year as Humira goes off patent that we can roll our call above the stock price. We’re not counting on it but it’s possible.
Let’s go ahead with this net debit roll.
ACTION: Roll the ABBV 23 Dec 152.50 call to the ABBV 6 Jan (23) 155 for a net debit of around 1.70 to 1.75
Buy to close the ABBV 23 Dec 152.50 call
Sell to open the ABBV 6 Jan (23) 155 call
Vale S.A. (VALE): 16.59
Vale stock price is running ahead of our call strike. We can’t roll it up without paying a big debit for a one strike gain. Let’s continue to roll the 15.50 calls out and build up more cash.
ACTION: Roll the VALE 23 Dec 15.50 call to the VALE 13 Jan (23) 15.50 call for a net credit of around 0.28 to 0.30 and a 1.8% return
Buy to close VALE 23 Dec 15.50 call
Sell to open VALE 13 Jan (23) 15.50 call
Williams Companies (WMB): 33.03
WMB stock has benefited from the stabilization of oil prices over the last couple of days. We can roll our 23 Dec 34 call out 2 weeks and collect a reasonable premium.
ACTION: Roll the WMB 23 Dec 34 call to the WMB 6 Jan (23) 34 call for a net credit of around 0.20 to 0.22
Buy to close WMB 23 Dec 34 call
Sell to open WMB 6 Jan (23) 34 call
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