TRADE ROLL

CF Industries (CF):  108.48

If you’ve been trading CF Industries (CF) as we have in the Triple Play Income portfolio, it was no surprise when the inflation numbers came out this morning at a stunning 8.5%.

We’ve traded CF in our portfolio since last June and continue to see this stock post new highs. The stock began a steady climb last fall and certainly was aided when Russia invaded Ukraine, driving already elevated fertilizer prices even higher.

We’re trying to manage this position on the conservative side and not let our feet get too far out in front of us. The current implied volatility rank on this stock is at 85% which is elevated enough to give us rich premiums 8 points or so out of the money.

We can roll our 14 Apr 96 put out and up today.

ACTION:  Roll CF 14 Apr 96 put to the CF 22 Apr 100 put for a net credit of around $0.95 to $1.00 or a 1% return 

Buy to close CF 14 Apr 96 put

Sell to open CF 22 Apr 100 put

TRADE ROLL

ONEOK, Inc. (71.48)

Another one of our inflation beneficiary stocks is ONEOK. Natural gas prices are up a shocking 75% this year with no signs of pulling back even as they head into normally mild spring weather. That has pushed OKE stock up to 52-week highs.

I’ve looked at adding another potential natural gas play to our portfolio that trades weekly options (remember, OKE reverted from weekly to monthly options at the beginning of this year). With these price spikes, we want to be careful overloading in this sector because oil and gas commodities are still the most volatile to trade.

For this week, let’s roll out our OKE 14 Apr 67.50 put position and collect more cash.

ACTION:  Roll OKE 14 67.50 put to the OKE 20 May 70 put for a net credit of around 2.30 to 2.35 and a 3.4% return

Buy to close OKE 14 67.50 put

Sell to open OKE 20 May 70 put