Trade Alert: Close MDLZ Puts and Open NKE Covered Calls

Just a quick note to deliver two new trades.

The S&P 500 snapped its six-day losing streak yesterday and is trading slightly higher again this morning. This could be a sign of stocks finding their feet, which could translate into a good bounce for the market. Here's how to take advantage.

First, consumer-staples firm Mondelez (MDLZ) entered the health indicator Red Zone on April 15, not long after we sold our puts on the stock.

Since there are plenty of healthy, Green-Zone stocks on sale right now, it's best to buy back this option at a profit now rather than being put the stock. Your valuable trading capital is better served aiming to buy a stock with more upside potential.

Also, we've been holding shares of Nike (NKE) for about one month now. It too, has traded into the Red Zone on March 26. I like Nike's longer-term prospects better, but we need to earn income from the stock to keep it in the portfolio. So, let's sell a covered-call option on NKE today.

Here's what to do:

Actions to Take...

1. Buy to close the Mondelez Int'l. (MDLZ) April 26, 2024, $68 put option (MDLZ240426P00068000) at a limit price of $0.15 or less, good till canceled.

2. Sell to open the Nike (NKE) May 3, 2024, $97 call option (NKE240503C00097000) at a limit price of $0.45 or more, good till canceled.

Place these trades right away and keep watch for more Ultimate Income trades likely this week. Plus, more market and portfolio updates 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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