As mentioned before, depressed volatility at this time is restricting the cash we can collect rolling or extending covered calls. We have several positions we will need to let expire worthless and several where we can pick up some cash in the short-term.

Reminder: The US stock market is closed Monday for Memorial Day. Have a good, long weekend.

Kraft Heinz (KHC): 38.22

Kraft Heinz goes ex-dividend on 6/5 and there is little or no premium to collect rolling our calls out a week. We let our 26 May 39 call expire worthless.

ACTION: No action. Let the KHC 26 May 39 call expire worthless.

Southern Co. (SO):

Southern Co. is a similar story to KHC. Stock is trading well below our entry price but even if we roll our strikes down there is not enough premium to collect. Let’s be patient. Southern Co. stock price is near a technical bottom that could see a rebound over the next week. We can look to sell calls after a couple of higher trading days in the stock.

Action: No action. Let the SO 26 May 75 call expire worthless.

Covered Call

Vale S.A. (VALE): 13.34

Iron ore prices are at a 6-month low and the China rebound that was supposed to lift VALE stock has been slower than expected. VALE stock is undervalued at this price but it may take another 2 or 3 months before we see a significant uptick.

The Vale dividend is still safe for now and at least with weekly options, we can continue to sell covered calls for a reasonable credit.

ACTION: Sell to open VALE 9 Jun 14 call for a net credit of around 0.13 and an almost 1% return.

TRADE ROLL

Williams Companies (WMB): 28.80

Williams Companies goes ex-dividend on 6/92 so we can roll our call out and down one strike to collect a credit.

Action: Roll the WMB 26 May 30 call to the 2 Jun 29 call for a net credit of around 0.20 to 0.22
Buy to close WMB 26 May 30 call
Sell to open WMB 2 Jun 29 call