Even with the market trading lower again today, we can look at managing two of our uncovered positions.

COVERED CALL

AbbVie (ABBV):  153.21

AbbVie stock is up 14% year-to-date even with a few extreme volatility moves higher and then lower. The company has continued to innovate through internal growth and acquisition, expand its smaller drug pipelines, and raise dividends … a solid income generator for us.

The elephant in the room is Humira, the giant cash drug of ABBV that goes off patent in 2023. Sales are expected to be off next year and it is too early to determine how profits will pan out. ABBV continues to be a dividend/premium combo stock we can trade around for the remainder of this year.

AbbVie goes ex-dividend on Thursday (7/14) and will pay $1.41. Given where the stock is trading now, we can safely sell an out of the money call to collect a credit and still earn the dividend.

ACTION:  Sell to open ABBV 29 Jul 157.50 call for a net credit of around 1.65 to 1.70 and a 1.1% return.

COVERED CALL

Philip Morris (PM):  94.53

Philip Morris stock finally put in a short-term bottom on the technical charts giving us a chance to get back in selling a covered call.

ACTION:  Sell to open the PM 29 Jul 97.50 call for a net credit of around 1.10 to 1.15 and a 1.2% return.