Another rough ending to the stock market in this shortened trading week. We have two put positions to manage today.

TRADE ROLL

Gilead Sciences (GILD):  81.73

Frustrating finish to the week for Gilead Sciences. The stock looked like it was building support at the market close yesterday but is getting hit today with the rest of the market. 

Gilead goes ex-dividend on 3/14 so we want to end up owning the stock before that date. That means we can’t roll the put out far enough to collect a credit. Instead, let’s roll the put out 2 weeks and down. Yes, we will pay a net debit to lower our potential assignment price of 84 but if the stock rallies back up, we can always roll it back into 3/10 and reduce the debit.

ACTION:  Roll GILD 24 Feb 85 put to the 10 Mar 84 put for a net debit of around 0.64 to 0.67

Buy to close GILD 24 Feb 85 put

Sell to open GILD 10 Mar 84 put

IBM (IBM):  130.16

ACTION:  No Action. Let the 24 Feb 139 call expire worthless. We will look at selling a call after the stock begins to trade higher.

TRADE ROLL

Philip Morris (PM):  98.81

Even Philip Morris, our defensive stock, is trading lower today. Down about 1% but we can still roll our put out 3 weeks and collect a credit.

ACTION:  Roll the PM 24 Feb 100 put to the 17 Mar 100 put for a net credit of around 0.90 to 0.95

Buy to close PM 24 Feb 100 put

Sell to open PM 17 Mar 100 put