It looks like the S&P 500 will finish higher this week after several brutal weeks of selling. It’s moving more of our Triple Play Income uncovered positions closer to being in range of selling covered calls again.
We have 3 positions that have ex-dividend dates coming up next week: BGS, CAH, and PM. We can wait until the day before they go ex-dividend before we sell a call, collect premium and earn the dividend.
OPEN NEW CALL
Blackstone (BX): 97.34
Blackstone stock has come back into a reasonable valuation at around $97. The stock is still highly volatile and it could easily drop 5 to 10 points as well as trade higher by that amount. Let’s enter with a covered call out 2 weeks to collect enough premium to take the risk.
ACTION: Sell to open BX 8 Jul 104 call for a credit of around 1.10 and a 1.2% return.
CF Industries (CF): 84.14
CF Industries stock price is still trying to find steady footing after several analyst downgrades over the last few weeks … primarily due to a pause in rising fertilizer prices. Demand for fertilizer products is still there, but the stock is getting hit after it’s run-up this year.
The stock is up today by almost 5%. We have a week to go on our 1 Jul 95 put, but if stock price continues to trade higher into next week, we will look to manage the position Tuesday or Wednesday.
ACTION: No Action.
Dow Inc. (DOW): 54.58
Our DOW 24 Jun 68 call will expire worthless. DOW has sold off more than some of our other stocks after a downgrade Wednesday based on potential continued supply chain issues. The company is well positioned for the long-term and continues to reduce debt as a result of the spin-out from Dupont several years ago.
The stock is up almost 5% today and gives us an opportunity to sell a call two weeks out to collect a reasonable premium.
ACTION: Roll the DOW 24 Jun 68 call to the DOW 8 Jul 56 call for a net credit of around 0.50 to 0.55 and a 1% return
Buy to close DOW 24 Jun 68 call
Sell to open DOW 8 Jul 56 call
That’s it for this week. Look for alerts next Tuesday or Wednesday to add covered calls to our 3 stocks with ex-dividend dates on 6/29 and 6/30.
Have a good weekend.
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