Shares of GM gapped lower this morning after a Wall Street downgrade.
Both Ford and GM face currency challenges as the strong dollar makes it tougher for American companies to compete overseas.
And there are still some supply chain issues lingering.
The stock moved below our $33 strike price.
And while shares are off their morning lows (and MAY rebound), this creates more risk for our income portfolio.
In a bear market season, we want to keep a tight leash on plays that don’t work out as expected.
So today, we’ll use our “parachute protection” strategy to exit our GM position.
By closing this trade out early we’re taking a small loss.
But we’re also managing our risk and freeing up capital that can be used for new income plays that are currently working well.
- Buy (to close) our GM November 18th $33 Puts
- Limit $3.10 or less
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- Executed 11:53
- BOT 2 GM Nov 18 $33 Puts @ $2.92