The market continues to throw amazing curve balls at investors as it opened higher yesterday only to sell off hard into the afternoon. We were about ready to send out our alert for new trade positions when the market reversed. Markets are a bit calmer today so we can add a few new trades.

OPEN NEW CALL

Cardinal Health (CAH):  53.83

Cardinal Health goes ex-dividend tomorrow (6/30) with a .495 dividend. The stock price is unlikely to spike today and we can saw a covered call today for a reasonable premium.

ACTION: Sell to open CAH 8 Jul 55 call for around 0.30 to 0.35.

TRADE ROLL

CF Industries (CF): 86.05

Fertilizer prices remain high because of demand pressure but these stocks have become highly volatile to trade. However, there is another reason fertilizer prices may spike again. Natural gas shortages across Europe have forced CF to close a plant in the UK and other European fertilizer producers are looking to do the same. Less production equals less fertilizer and should result in higher prices.

We have over $17.00 of credit this year from selling and rolling puts week after week rather than chasing dividend by owning the stock. Let’s stick with this strategy for now.

ACTION:  Roll the CF 1 Jul 95 put to the 8 Jul 95 put for around 0.40 to 0.45

Buy to close CF 1 Jul 95 put

Sell to open CF 8 Jul 95 put

OPEN NEW CALL

Philip Morris (PM):  102.14

With 98% of its business outside the US, Philip Morris stock has been avoiding the hit that Altria (MO) stock has been taking over US legislation and an FDA ruling banning e-cigarettes from Altria’s Juul business. 

Philip Morris goes ex-dividend tomorrow (and will trade lower) and we can safely sell an out of the money call today and avoid any run on the price. The premium is smaller than we usually collect with PM but let’s take it.

ACTION:  Sell to open PM 8 Jul 104 call for a credit of around 0.35 to 0.45.