Trade adjustment – Safeway (SWY) put selling rollover

As Safeway (SWY) was drifting lower and keeping my spread between the stock price and strike wider I decided to rollover the trade once more. I already rolled this trade lower once, you can see the trade in this post.

I had the opportunity to roll down my strike and slightly further away in time and collect more cash in premium.

I lowered my strike and thus my potential obligation of buying this stock if assigned for lower price ($30 per share in lieu of the original $34 a share) and yet collected a premium.

I decided to rollover now in case the price continues drifting further down to avoid too wide spread between strike and underlying price which would cause me paying for the rollover instead of receiving money.

If that happens and the stock drops that much down that I will not be able to rollover again for a credit, then I let the put option to be assigned and accept the stock.

In that case my purchase price of Safeway will be $22.15 a share. And that is definitely a price I am OK to accept.

Trade Detail

Here is the trade detail:


01/23/2014 11:53:05 Bought 1 SWY Jun 21 2014 33.0 Put @ 3.76
01/23/2014 11:53:05 Sold 2 SWY Sep 20 2014 30.0 Put @ 2.72

I collected $156.10 after commissions.





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