It was another wild week of intraday swings in the market. Up 1% and then down 2% and then back up 1%. A lot of active trading in big lots by institutional and high-frequency traders trading highly volatile indexes and ETFs with same-day expirations (0DTE). Most of our positions held up through the chaos, though, heading into today’s monthly options expiration.
We discussed in our Triple Play Income review session last week that we would be adding new tickers in the coming weeks. One of the stocks on our radar was Devon Energy (DVN). With the stock down 17% this week after the company missed earnings estimates, we will hold off on entering a position until we see a potential bottom.
Note: The U.S. stock market is closed Monday for Presidents’ Day. Hopefully, we will see the market settle down now that we are past monthly expiration.
AbbVie (ABBV): 150.41
Our 17 Feb 157.50 call is on track to expire worthless. AbbVie stock has traded lower for four consecutive days and we don’t like to sell calls on a stock that is declining. While the stock price is up slightly today, we will still let our call expire and sell a new call next week if we get several days of increasing price.
ACTION: No action. Let the AABV 17 Feb 157.50 call expire worthless.
Blackstone (BX): 93.31
Blackstone has traded lower the past three days. I was tempted to roll the call out and down to collect a credit, but with the market closed Monday, let’s see if we get a rebound in the price Tuesday and Wednesday. If we do, we can sell a call then and still collect a reasonable premium.
ACTION: No action. Allow the BX 17 Feb 100 call to expire worthless.
Camping World Holdings (CWH): 25.75
Camping World reports earnings Tuesday, which is giving us elevated premiums to roll our 17 Feb 26 call. Let’s roll this call out one week and up two strikes for a solid premium.
ACTION: Roll CWH 17 Feb 26 call to the 24 Feb 27 call for a net credit of around 0.60 to 0.65 and a 2.4% return
Buy to close CWH 17 Feb 26 call
Sell to open CWH 24 Feb 27 call
Dow Inc. (DOW): 84.46
We should be rolling our 17 Feb 55 put for another credit, but Dow goes ex-dividend on Monday, Feb. 27. I don’t like “ex-dividend” Mondays, and we need to own the stock by Friday. The Monday ex-div date gives us no chance to roll a put this week and still buy the stock in time. We will let our put expire today and then buy the stock Tuesday or Wednesday next week.
ACTION: No action. Let the 17 Feb 55 put expire.
ONEOK, Inc. (OKE): 67.42
We are in good shape with OKE as the stock traded in a flat range (up until today). We can roll our call out to March and collect a solid premium.
ACTION: Roll OKE 17 Feb 70 call to the 17 Mar 70 call for a net credit of around 0.85 to 0.90 and a 1.2% return
Buy to close OKE 17 Feb 70 call
Sell to open OKE 17 Mar 70 call
Rio Tinto (RIO): 74.28
Rio Tinto goes ex-dividend on March 9, a week ahead of the next monthly expiration date. We want to own the stock by then with the potentially generous $3 to $4 dividend. This is the challenge of trading stocks with only monthly options. We can’t roll our put out a few more weeks and then buy the stock.
Our 17 Feb 77.50 put is in the money. We will let the put assign and acquire the stock over the weekend.
ACTION: No action. Let the stock assign.
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