We have two covered calls and a put that are all getting far out of the money. Let's close those, then roll a couple of them out for more instant income.
On Monday, you should have (finally) been filled selling the Charles Schwab (SCHW) Mar. 15, 2024, $60 puts. We're aiming to buy the financial-services blue-chip at a discounted price.
You should have also been filled rolling your put options on ProShares Ultra Semiconductors ETF (USD) to target a higher, more realistic price for USD via our new USD Mar. 15, 2024, $72 puts.
As for Coterra Energy (CTRA), it was close but no cigar. The CTRA Apr. 19, 2024, $24 puts traded near my $0.30 limit but not through it. Keep working this order for now, and we'll adjust if needed.
Meanwhile, we have two open covered-call option trades and a put that are all getting far out of the money. Your Mattel (MAT) put is worth rolling to collect more instant income a bit sooner than planned, as I've recommended below, plus extending the expiration keeps us in a good position to buy MAT shares on a dip.
Covered-call options on both Cisco Systems (CSCO) and Occidental Petroleum (OXY) are likewise out of the money. But oversold CSCO shares are forecast to turn higher over the next few months, according to our Trade Cycles timing indicators.
As you can see below, CSCO is moving through a valley phase now (blue shading), after which Trade Cycles expects it to surge to another peak (orange shading) in March–April, then do it again in May–June:
So, let's hold off selling a new CSCO call right now and instead wait for higher prices into April-May. But go ahead and close your existing CSCO call now for just pennies, as shown below.
On the other hand, your OXY covered call looks ripe right now to roll out another month to collect more income, plus switch to a slightly higher strike price, also detailed below. Here's what to do now.
Actions to Take...
1. Buy to close the MAT Apr. 19, 2024, $17 put option (MAT240419P00017000) and at the same time sell to open the MAT July. 19, 2024, $18 put (MAT240719P00018000) for a credit of $0.55 or more, good 'til canceled.
Note: Aim to buy back your existing call option for about $0.15 or less and sell the new option for $0.70 or more, resulting in a $55 net credit.
2. Buy to close the Cisco Systems (CSCO) Mar. 1, 2024, $53 call option (CSCO240301C00053000) at a limit price of $0.05 or less, good 'til canceled.
3. Buy to close the OXY Mar. 15, 2024, $64 call option (OXY240315C00064000) and at the same time sell to open the OXY Apr. 19, 2024, $65 call (OXY240419C00065000) for a credit of $0.45 or more, good 'til canceled.
Note: Aim to buy back your existing call option for about $0.25 or less and sell the new option for $0.70 or more, resulting in a $45 net credit.
Place these trades ASAP and stay tuned for more Ultimate Income coming your way soon.
Good investing,
Mike Burnick Senior Analyst, Ultimate Income
P.S. If you have any questions or concerns, please reach out to me at emailmikeburnick@tradesmith.com and include "Ultimate Income" in the subject line.
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