Rolling a position in KMB

themoneyloaf
1 day ago
3 min read

Happy February! (already?!)

Not all trades work out immediately, and this trade in KMB that's currently being rolled is one of them.

Btw the chance to register your interest in my next course for 2026 is in just 2 weeks! The link will be shared via this newsletter on Feb 15. Course FAQs can be found here.

This week:

rolling a position in Kimberly Clark (KMB)

Rolling KMB

Back in 2025, when KMB was trading at about $120, I sold the $110 cash-secured put expiring on Dec 19 and received $100 in premium.

Little did I know KMB was going to announce an acquisition of Kenvue from JNJ, and that the market was not going to like the news, resulting in KMB dropping nearly 20% in November.

Of course, this also meant that my previously "safe" trade was suddenly in the money, which means I might need to pick up 100 shares at $110 per share.

Now I don't have a problem with owning shares of KMB, but I would like to be forced into the position. So to delay the assignment, I rolled the position from the Dec 19 expiration to Jan 16 for an additional $0.60

Unfortunately, KMB continued to drop and I had to roll the trade once more to the March 20 expiration for an additional $2.05

So let's take stock of the position: I still have a $110 cash-secured put, which means my obligation is still to buy 100 shares at $110 a share, but now I've collected $365 in premium instead of the initial $100.

This means if I were to be assigned, my effective cost basis would be $106.35 per share.

Even though KMB is currently trading at $100, this position is still better than if I decided to purchase KMB outright when it was trading at $120 per share.

When KMB eventually rebounds, I'll also be able to get out much earlier at the $106.35 cost basis instead of $120.

Even if you have no interest in managing an options portfolio, using cash-secured puts to purchase long-term stock positions at a discount still places you in a better position than buying stocks at market prices.

This trade (and all trades in this newsletter) are shared in close-to real time to my private community as updates in my own portfolio (not recommendations), and I'll be sharing updates as to how I'm going to eventually get out of this position too.

If you're familiar with the basic mechanics of options, you can consider joining the private community to view these updates as well.

You can find out more about my private community at the link below.

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Closing thoughts & useful links

A couple of new trades in the portfolio this week thanks to earnings - looking forward to more opportunities next week!

Have a good weekend!

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This article is for educational purposes only. This is my own portfolio which is being managed according to my goals and risk tolerance. Your situation is likely different and you should do your own due diligence before investing in stocks or options.