With the market running higher since last week’s CPI report, we have several positions where stock prices are running well ahead of our call strikes. With the market down today, we can start managing several of these positions with rolls.
B&G Foods (BGS): 24.02
Despite rising food prices around the world, our two food stocks (BGS and KHC) continue to struggle for traction in the market. Revenues are up in both companies and across the industry primarily due to passing increased costs on to you and I at the supermarket.
In 2021, both company’s management teams made improvements to their strategic corporate positions which were expected to increase earnings this year, but inflation has slowed momentum as it always hits consumers hardest in the food and energy sectors … and our two stocks have not been able to advance their stock prices this year.
And as we’ve mentioned before, BGS only trades monthly options which makes it more of a challenge to capture premium on a regular basis. We will continue to manage this position for the next few months and if we don’t see improvements in the bottom line, we will move on to another dividend stock opportunity.
Meanwhile, we have a 19 Aug 27.50 call to roll today in BGS.
ACTION: ROLL the BGS 19 Aug 27.50 call to the 16 Sep 25 call for a net credit of around 0.50.
Buy to close the BGS 19 Aug 27.50 call
Sell to open the BGS 16 Sep 25 call
If you are not in BGS trade, you can buy the stock at market and sell the 16 Sep 25 call for a credit of around 0.50 to $0.55.
ONEOK, Inc. (OKE): 63.16
ONEOK has been one of our stronger dividend performers of 2022 … largely due to the shortages and price hikes in natural gas. The stock has run higher than expected but is still in a range where we can manage our calls with their move from weekly to monthly options.
Let’s roll our calls up 2.5 points or $250 of capital gains and take a smaller credit for now.
ACTION: ROLL the OKE 19 Aug 62.50 call to the 16 Sep 65 call for a net credit of around 0.20 to 0.25.
Buy to close OKE 19 Aug 62.50 call
Sell to open OKE 16 Sep 65 call
If you are not in the OKE trade, you can buy the stock at market and sell the 16 Sep 65 call for a credit of around 1.20.
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.