Market volatility continues to dominate trading in the stock market. The VIX, that tracks volatility in the S&P market, is back up in the 32 range. That’s good for us as options sellers … it means we can collect more premium on most of our stocks. But it also means that individual stock prices can swing wildly. We’ve seen that with a few of our more volatile positions.

 

Positions to review and manage today.

 

TRADE REVIEW

 

Blackstone (BX):  107.50

 

Blackstone is one of the dominant players in both the financial world (assets under management) and the real estate marketplace … two sectors that have taken big hits lately. The valuation of the stock is coming back into a comfortable range but it’s too early to call BX cheap.

 

We earned our dividend of $1.32 from Blackstone stock last Friday as well as our 29 Apr 125 call expired worthless. With the Fed meeting coming up this Wednesday, let’s hold off selling another call for now until we see how the market reacts. We may be able to sell a call later this week if the stock price rallies after the Fed meeting.

 

ACTION: No Action Today.

 

 

TRADE ROLL

 

CF Industries (CF):  98.49

 

CF Industries reports earnings tomorrow and goes ex-dividend next Friday. We are skipping the 0.40 dividend to collect more premium rolling puts. There is a good chance CF will report an earnings beat but may guide down for the next quarter. Let’s roll our puts out one week to collect a solid premium. We collect cash and guard against a bad earnings reaction.

 

ACTION:  Roll the CF 6 May 92 put to the CF 13 May 92 put for a net credit of around 0.95 to 0.97 and a 1% return

Buy to close 6 May 92 put

Sell to open 13 May 92 put

 

TRADE ROLL

 

Cardinal Health (CAH): 59.42

 

Cardinal Health price has come back down giving us a chance to roll our 6 May 58 call out for a credit. The company will report earnings Thursday before the market open … and even if it beats estimates the stock could go either direction.

 

Better to take some extra credit now and roll it out.

 

ACTION:  Roll the CAH 6 May 58 call out to the 20 May 58 call for a net credit of around 0.40 to 0.45

Buy to close CAH 6 May 58 call

Sell to open CAH 20 May 58 call

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