Close SONO and TX Covered Calls
The market is having another ugly day, and two of our stocks (SONO and TX) that recently broke our mental stops have not shaped up post-quarter-end last Thursday.
While it’s possible that the market, and these stocks, will bounce in the days to come, it’s also possible that the recent 5-6% declines in the indexes are the start of a larger fall. For that reason, we are going to exit these positions today, and will not roll to new call sales.
To execute these trades you need to:
Sell SONO stock
Buy to Close the October 40 Call
And
Sell TX stock
Buy to Close the October 55 Call
While these two losses are not fun, the market’s decline has caused a spike in option volatility, which will create a nice call-selling opportunity for tomorrow’s idea.