The Fed spoke. They want to beat down inflation with increasing rate hikes and hope for a soft landing into a minor recession. Ok. Who knows if we get that but stocks continue to pay the price with another down day on Wall Street.
We have a few positions that are trading against the grain today and we can manage those positions right now.
AbbVie (ABBV): 143.36
AbbVie is one of our few portfolio stocks trading higher today. While the stock price is still down for the year, some areas of healthcare are becoming a haven for investors. AbbVie may be one of those. Let’s roll our 23 Sep 145 call out and up.
ACTION: Roll the ABBV 23 Sep 145 call to the ABBV 7 Oct 146 call for a net credit of around 1.40 to 1.45 and a 0.9% return
Buy to close ABBV 23 Sep 145 call
Sell to open ABBV 7 Oct 146 call
CF Industries (CF): 101.81
Halting production of fertilizer in many countries in Europe only supports more demand for fertilizer in North America … a good thing for CF Industries. This was one of our key inflation positions early on and until we see a larger retreat in the CPI number, we still want to be selling premium on CF.
Let’s roll our CF 23 Sep 102 put out two weeks and down a couple of points to play it on the conservative side.
ACTION: Roll the CF 23 Sep 102 put to the CF 7 Oct 100 put for a net credit of around 1.80 – 1.85 and a 1.9% return
Buy to close the CF 23 Sep 102 put
Sell to open the CF 7 Oct 100 put
IBM (IBM): 125.27
The NASDAQ is selling off but IBM is trading higher today. Again, goes to show that IBM has moved out of the “go-go” tech space and into more “business solutions” sector. Let’s roll our call out and up.
ACTION: Roll IBM 23 Sep 131 call to the IBM 21 Oct 134 call for a net credit of around 1.45 to 1.49 and a 1.2% return
Buy to close IBM 23 Sep 131 call
Sell to open IBM 21 Oct 134 call
Vale S.A. (VALE): 13.50
Another one of our inflation plays. VALE is up today against the market trend. Let’s roll our call out another 3 weeks for a good chunk of premium.
ACTION: Roll the VALE 23 Sep 14.50 call to the 14 Oct 14.50 call for a net credit of around 0.24 to 0.26 and a 1.8% return.
Buy to close VALE 23 Sep 41.50 call
Sell to open VALE 14 Oct 14.50 call
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