We have one more position expiring today, as well as the opportunity to sell covered calls on two of our other holdings.

NetApp (NTAP): 62.59

NetApp has been bouncing up and down… and for a reason.

On April 10, the company received an upgrade from analyst Stifel for “potential positive catalysts,” and the stock traded up 6% from 63 to 67. Then, on April 20, Bank of America downgraded NTAP citing potential “challenges” in future revenue growth. The stock has sold off 5%.

Analyst upgrades and downgrades typically have a very short-term impact on stock prices. They are easy to ignore, as they are just one outfit’s view at that time. That view can (and often does) change from positive to neutral to negative to positive, sometimes within just a few months’ time.

Unfortunately, we sold our NTAP 28 Apr 67 put after the Stifel upgrade and the latest downgrade has our position too far in the money to roll for a credit. We will accept shares and sell a covered call next week.

ACTION: We will be assigned NTAP stock over the weekend and sell a call next week.

NEW MEMBERS: You can buy shares now or when we sell a covered call.

COVERED CALL
Camping World (CWH): 22.28

The stock has been in a nice uptrend this week, which allows us to sell a covered call. Earnings come out on Tuesday, May 2, and we can take advantage of the elevated premiums.

Those who do not own CWH stock can set this trade up as a buy-write.

ACTION: Sell to open CWH 12 May 24 call for around 0.35 to 0.40.

NEW MEMBERS: Buy shares at market and sell the CWH 12 May 24 call.

COVERED CALL
Williams Companies (WMB): 30.34

As we discussed in Wednesday’s Review Session, Williams Companies’ premiums have been a disappointment. Despite having weekly options and earnings coming out Wednesday, May 3, we are not seeing the elevated premiums we would typically see in this natural gas stock. And that’s been the case with WMB for all of 2023.

We are going to move on from our Williams’ position and replace it with another energy play with higher implied volatility and richer premiums. We will likely come out with that new trade next week.

In the meantime, let’s look to exit WMB by selling an in-the-money call and plan on our shares being called away next week.

ACTION: Sell to open WMB 5 May 30 call for around 0.65 to 0.70.