After a late day bounce in the stock market after the Fed announcement, volatility has come screaming back pushing the market lower. We don’t like selling covered calls on really big down days in the market only to see the stocks bounce higher the next day. We will need to be patient with several of our positions I was planning to trade today.

We can take action on IBM. 

TRADE CLOSE and BUY STOCK

IBM (IBM):  137.39

We got a break with the Fed raising rates yesterday sending the market higher and IBM stock price above our 6 May 135 put after 3:00 PM. It retraced today but let’s close that put today for a small profit and then buy IBM stock at market today (no later than tomorrow) as IBM goes ex-dividend on Monday and pays a 1.65 dividend.

ACTION 1: Buy to close IBM 6 May 135 put for a net debit of around 0.80 to 0.84 and around a 0.35 profit.

ACTION 2:  Buy IBM stock at market before the close on Friday (5/6)

We will see a covered call on IBM next week.