Triple Play Income Trade Alert: OKE, PM

Dear Triple Play Income Member,

Here are two more positions we can manage today.

ONEOK, Inc. (OKE): 62.30

Natural gas prices keep spiking higher and that has helped ONEOK stock price. The company reports earnings on 2/28 and we just collected a nice dividend of 93.50/share on Monday.

We have an 18 Feb 62.50 call open. Let’s roll it today out one month.

Remember, OKE has gone from weekly options to monthly options, so we are going to roll our calls strike to strike.

ACTION: Roll OKE 18 Feb 62.50 call to the 18 Mar 62.50 call for a net credit of around 1.70 and a 2.7% return

Buy to close OKE 18 Feb 62.50 call

Sell to open OKE 18 Mar 62.50 call

Philip Morris (PM): 109.53

Philip Morris stock price run continues. It’s now trading at a 52-week high … perhaps on news from the company’s recent earnings beat. The challenge in trading PM is growing … as the stock price trades over $100, volatility in the options has flattened out giving us less premium to work with on our rolls.

Our 18 Feb 97.50 put is trading less than 0.10. Let’s roll it up and out.

ACTION: Roll the PM 18 Feb 97.50 put to the 4 Mar 107 put for a net credit of around 0.60 to 0.65 and .6% return

Buy to close PM 18 Feb 97.50 put

Sell to open PM 4 Mar 107 put

David Durham

Triple Play Income