Two positions we can manage today ahead of expiration tomorrow.
CF Industries (CF): 95.83
CF Industries just announced a 33.3% dividend increase from 0.30 to 0.40 and the company reports earnings on Wednesday (5/4).
As in the past with CF Industries, we can collect far more income rolling our puts out and skip the dividend then trying to close the put at a loss, buy the stock, and sell a call. Premiums are rich and we can roll our put down and collect a good premium. Earnings will come out on 5/13 so we will only roll our position out one week.
ACTION: Roll CF 29 Apr 97 put down to the 6 May 92 put for a net credit of around $1.00 and a 1.1% return.
Buy to close CF 29 Apr 97 put
Sell to close CF 6 May 92 put
Be patient and work the trade. CF is not as liquid as it has been in the past.
ONEOK, Inc. (OKE): 65.95
As we mentioned in an earlier alert, OKE announced their ex-dividend date (tomorrow 4/29) after we rolled our April put to May. Our 20 May 70 put is in the money and with 20 days to expiration, we will do nothing to manage this put position at this time.
For those of you who have the capital and want to collect the .935 dividend, buy OKE stock at market today. We will purchase the stock in our Triple Play Income test account to earn the dividend and sell a call either tomorrow or early next week. This in effect will put us in a “double dip” situation of owning the stock while having an open put position.
ACTION 1: OKE 20 May 70 put – No Action
ACTION 2: Buy OKE stock at market (65.95).
Get notified about new articles, special events, training, and much more
Leave your info below to get more options and trading ideas to your inbox
Yes, send me news to my inbox.