The Fed raised interest rates this week by .25 points and the market likes it. Whether this is the beginning of a 2023 bull market or the calm before a bear market trap, we can take advantage of this current upward trend to sell covered calls.

 

COVERED CALL

 

Blackstone (BX): 101.31

 

We have been sitting on Blackstone stock for a while waiting on it to rally and hold, and it appears we are there. The implied volatility is rising on the options which should give us enough premium to go out one week and collect a solid credit.

 

TRADE ACTION:  Sell to open the BX 10 Feb 105 call for a net credit of around 0.80 to 0.85 and a .8% return

 

TRADE ROLL

 

CF Industries (CF):  85.77

 

CF goes ex-dividend on 2/14 and reports earnings on 2/15. Let’s roll our call out one week strike-to-strike before we decide how to play the two upcoming events.

 

TRADE ACTION:  Roll the CF 3 Feb 89 call to the CF 10 Feb 89 call for a net credit of around 0.65 to 0.70 and a .9% return

Buy to close CF 3 Feb 89 call

Sell to open CF 10 Feb 89 call

 

COVERED CALL

 

Williams Companies (WMB):  32.01

 

The premiums have dried up on our mid-stream gas play in Williams Companies. We were getting a 1% credits last fall along with the rise in natural gas prices.  Natural gas is down due to the warmer than expected winter and so are WMB’s premiums.

 

We can still sell a covered call this week and collect a reasonable credit for now.

 

ACTION:  Sell to open WMB 17 Feb 33 call for a net credit of around 0.25 and a 0.75 return.