As earnings reports continue to roll on, we have several new positions to re-enter this week. Let’s get started with two put options.
Philip Morris (PM): 103.36
Philip Morris stock price has traded in the $95 to $105 range for the last year but could be aided now by a recent upgrade from Goldman Sachs. Let’s take advantage of the elevated premiums due the upcoming earnings report on 2/9 to open a new put position.
ACTION: Sell to open PM 10 Feb 100 put for a net credit of around 0.80 to 0.85 and a 0.8% return.
Rio Tinto (RIO): 79.53
We added Rio Tinto stock a year ago as a commodities/inflation hedge play in the mining space. The company has mining sites throughout the world and is one of the largest producers of copper and iron ore resources. Last year, RIO sported a 10% yield that was paid out semi-annually (March/September) with 60% of that dividend paid out in March.
RIO is an aggressive growth play in our service compared to the traditional “value stocks” we trade in Triple Play Income. The stock traded lower in the first half of 2022 due to the shut-down in China, but we still managed to generate a 22% return last year on dividends and premiums collected.
Demand for iron ore has picked up with China coming back and the stock price is up about 30% since October. RIO goes ex-dividend on 3/10 so we will continue to trade this position through the first quarter of 2023. Let’s re-enter the RIO selling the February monthly put.
ACTION: Sell to open RIO 17 Feb 77.50 put for a net credit of around 1.00 to 1.05 for a 1.3% return.
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