After the three straight days of the market closing lower, we got a lift today with the broad market trading higher. This is going to be the day of assignments … where we are going to have to let stocks be called away or take assignment of stock shares.


Kraft Heinz (KHC):  39.87


Kraft stock price has enjoyed a solid run-up since October along with many other consumer staples stocks. The stock may have been overbought for the short-term but it also looks like someone on Wall Street is betting against KHC by purchasing a big volume of Jan 39 puts in hopes the stock price falls further.


No matter the reason for the price drop, our sold put is well in the money and we can’t roll it for a credit. We will take assignment of KHC stock.


ACTION:  NO ACTION. Take assignment of KHC stock.


Note: Our Triple Play Income master portfolio was assigned KHC stock at 42 this past Wednesday.


ONEOK, Inc. (OKE):  69.61


ONEOK stock price has been on the march through the fall into early January and because we are limited to monthly options, it has been difficult rolling our call option strikes ahead of the price. We were successful for 3 months but we’ve run out of room at the 57.50 and 60 strike level. 


OKE is going to continue to benefit from natural gas prices as demand from Europe for US natural gas continues to rise. We like the company and the stock in 2023 … but OKE is in the commodity space which means there will continue to be wild swings in the price. And by only offering monthly options this makes stock harder to sell calls and collect a reasonable premium.


ONEOK goes ex-dividend next Friday. We will let OKE stock be called away this weekend. We can re-enter the position next week to earn the dividend.


ACTION: NO ACTION. Allow OKE stock to be called away.


Rio Tinto (RIO): 77.95


Rio Tinto is almost the same story as OKE. This mining stock with monthly options has been on a tear recently after trading lower most of the 2022. We were unable to stay ahead with call options so we will be called out of RIO stock this weekend.


We will be evaluating the risk-reward of getting back into RIO for 2023 (we already have a mining-oriented position VALE). 


ACTION:  NO ACTION. Allow RIO stock to be called away.

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