TRADE ROLL

 

CF Industries (CF):  104.38

 

Another week where CF stock has traded up and down despite a steady drop in IV Percentile to below 40. Let’s play it cautious here. We will roll our put out one week and up one strike.

 

ACTION:  Roll the CF 2 Dec 99 put to the 9 Dec 100 put for a net credit of around 1.00 to 1.03 and a 1% return

Buy to close CF 2 Dec 99 put

Sell to open CF 9 Dec 100 put

 

SELL PUT

 

IBM (IBM):  148.63

 

We have been out of an IBM position since November 18 as the stock price went on a big run. It is starting to hit resistance at 150 and looks like it could trade in a range for a while. 

 

We are going to play this cautiously and sell a put at around 5 points out of the money (.23 delta for you option Greek followers). It’s still a reasonable credit for holding this position for around 14 days.

 

ACTION:  Sell to open IBM 16 Dec 144 put for a net credit of around 0.85 to 0.90 and a 0.6% return

 

Williams Companies (WMB):  34.85

 

Williams Companies stock has traded higher along with the energy sector despite the drop in oil prices over the last few weeks. It is trading above our 2 Dec 32 call strike. However, the ex-dividend is next Thursday (12/8) and we are not going to be able to roll it high enough for a credit to avoid potentially being called out on Wednesday.

 

Let’s leave our 2 Dec 32 call open and unless the stock price craters over the next 24 hours, we will be called out of the stock over the weekend. We will buy the stock back ahead of next Thursday’s ex-dividend date.

 

ACTION: NO ACTION.