Earnings season is starting to kick-in and several of our positions will report earnings this week including IBM who announced last night. For some of our positions, it has elevated volatility levels and will give us extra premium that’s been running light for the last 20 days or so.
We can manage a few of our uncovered stock positions today with new calls and then look at positions that we need to roll tomorrow and Thursday.
Blackstone (BX): 98.45
Blackstone stock is up 5% today with the market ahead of earnings on Thursday. Blackstone has been blowing away earnings for the last 4 quarters but uncertainty in the economy and expected Fed rate hikes could impact forward guidance.
Let’s be patient and wait until the earnings report comes out on Thursday before the market opens and we can manage the position during the day.
Gilead Sciences (GILD): 62.00
Gilead’s earnings report is scheduled for 8/2 with no expectations of their estimates positive or negative. At this time, we’d rather take advantage of the elevated volatility and richer premiums and sell a covered call for the Friday after the report.
ACTION: Sell to open GILD 5 Aug 63 call for a net credit of around 1.10 to 1.15 and a 1.7% return.
Kraft Heinz (KHC): 38.81
Our position in Kraft is uncovered and with volatility running high with the earning report next week (7/27), we can sell a covered call for 5 Aug for a solid credit.
ACTION: Sell to open KHC 5 Aug 40 covered call for credit of around 0.60 to 0.65 and a 1.5% return.
ONEOK, Inc. (OKE): 58.58
We’ve sat out selling options on OKE since the middle of June … partly due to the sell-off in the stock price but also the monthly options hardly gave us a decent return for taking the risk to sell a call closer to the money.
We’ve taken assignment on OKE twice in the last 2 months. First at $65 per share and then again at $70. The option volatility is elevated with earnings coming up on 8/8 and we can sell covered calls at two different strikes to give us some room if the stock pops and still collect a reasonable premium.
ACTION 1: Sell to open OKE 19 Aug 60 call for a net credit of around 1.20 to 1.25 and a 2% return.
ACTION 2: Sell to open OKE 19 Aug 62.50 call for a net credit of around 0.45 to 0.50 and .8% return.
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