The CPI numbers came out today with a slightly lower-than-expected inflation print and the market is off and running. We will need to manage a few of our positions this morning since we don’t know if this run will continue or we get a retracement before the end of the week.

TRADE ROLL

Blackstone (BX):  106.50

Blackstone stock was the most obvious beneficiary of a potential stronger economy and short-term bullish move. The stock price has over-run our 12 Aug 105 short call. We can roll it out two weeks and up a strike and still collect a reasonable premium.

ACTION:  Roll the BX 12 Aug 105 call to the 26 Aug 106 call for a net credit of around 1.40 to 1.45 and a 1.4% return

Buy to close the BX 12 Aug 105 call

Sell to open the BX 26 Aug 106 call

New Members: You can buy the stock at market (around 106) but should sell the 26 Aug 110 call for a credit of around 1.90. If BX stock runs above the strike by the expiration date, you will have collected $5.30 to $5.40 of profit ($530 to $540 of net cash). 

TRADE ROLL

CF Industries (CF):  103.23

CF Industries is one of our inflation beneficiary plays … a producer of nitrogen and hydrogen for a number of industrial activities but the stock has benefited the most from the shortage in fertilizer since the beginning of this year. 

We got into CF a bit early in May of 2022 when the stock was trading at $48 and now it’s the stock that keeps on giving. CF received two more analyst upgrades this week and is holding strong over $100. This is the one stock in our Triple Play Income portfolio that we take a “pass” on the dividend (CF goes ex-dividend this Friday) because the pay-out has shrunk compared to the premiums we can collect selling puts only.  

Let’s roll our put 12 Aug 97 put out one week and up a few strikes.

ACTION:  Roll the CF 12 Aug 97 put to the CF 19 Aug 100 put for a net credit of around 1.55 to 1.65 and a 1.6% return.

Buy to close the CF 12 Aug 97 put

Sell to open the CF 19 Aug 100 put

New Members: You can sell the CF 19 Aug 100 put for around 1.80 to 1.82.