After the beating it took last week, the stock market is up big today which give us a chance to manage a couple of our positions by selling covered calls on two uncovered stocks. If we get another strong day in the market tomorrow, expect us to begin covering more of our open positions this week.
Camping World Holdings (CWH): 25.42
Camping World went ex-dividend two weeks ago, sold off during the market downturn and started to rebound late last week. We can go ahead and sell a covered call today.
ACTION: Sell to open CWH 21 Oct 29 call for a net credit of around 0.40 to 0.42 and a 1.5% return
Kraft Heinz (KHC): 33.70
Kraft Heinz is one of our two food stocks that have disappointed investors in 2022. Kraft was hit with the double whammy of rising food production costs that were passed on to consumers in the form of higher prices at grocery stores. And second, rising costs cut into their plans to pay down big chunks of debt early.
KHC has not been a great performer in this current environment but we will be evaluating both of our food stocks (KHC, BGS) heading into the 4th quarter. As long as we don’t get a dividend cut in the near term, will stick with KHC for now.
ACTION: Sell to open KHC 21 Oct 35.50 call for a net credit of 0.25 to 0.28 and a .8% return.
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