Retirement Income Options: Selling Options Around Earnings

Summary

  • It looks like a double top forming into Fed Tapering. Buyers beware.
  • Selling covered calls here looks like a great idea across the board. I’ve added some ideas. Please ask me about your stocks in the comments or chat!
  • There are still some great cash-secured puts for the SMID caps, SPACs and former SPACs.
  • Remember, investing is about finding spots in the market that are inefficient, otherwise, we’d just index.
  • Look for overvalued/overbought and undervalued/oversold to act on. Avoid the middle of the market, we end up there anyway with our ETFs.

Retirement Income Options focuses on our Plug & Play lists for simplicity. You’ll find conviction trades ready right now that I am making, as well as, charts of option selling ideas for all Plug & Play Stocks for this quarter.

If you have other stocks or ETFs that you have a question about, i.e. looking covered call or cash-secured put opportunities, please ask a question in the comments and I will post an answer and/or include in next week’s article.

See Quarterly Plug & Play articles in Resources for chart links.

Make sure to read:

c = covered call p = cash-secured put

Except where noted, trade ideas refer to normal 3rd Friday expirations.

Bold are newly added stocks/ETFs.

Covered call recs are based on the idea you own the underlying already, NOT to do a buy-write.

Conviction Trades

My conviction trades are those I am trying to make this week. Depending on price movements,  which may or may not execute depending on price movements. These ideas are based upon the buy zones and oversold or overbought signals.

We don’t make trades to just make trades. We want the odds on our side to mitigate our risk while we generate income and accumulate shares in Plug & Play stocks & ETFs.

We try to look for overvalued/overbought and undervalued/oversold to act on. And, we try to avoid the middle of the market as much as possible.

Remember, always try to get a bit more than the ASK when selling options, use the volatility. You can walk the premium down a nickel at a time over a day or two.

Updates to previous trades in bold italics.

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Covered Call Ideas

See the recent article with 3 covered call ideas and the criteria for when to sell covered calls:

Double Or Triple Your Income With Covered Calls On These 3 Dividend Stocks

Nutrien (NTRThis option is still in play. Go ahead and sell it. I added this last week, you should be able to get it now. TA has had a great run and recently broke out. The spike the past month or so is overdoing it. Stock likely pulls back to $60ish. Is a good time to almost double your dividend income with a covered call in my opinion. Trim it too if you have it.

  • Selling $75 December covered call for $1.25+

Travel America (TAIf you sold this last week, the stock is moving down and your call is becoming profitable, keep an eye on it for profit taking opportunity. Remember, time value doesn’t really fall much off until late November, so don’t have an itchy clicker finger. I put this up last week, you should be able to do it now. I do love this business model, but it’s not asset light and credit is getting tighter. Time to create some income from this one as it might enter a lull. Trim it too if you have it.

  • Selling $55 December covered calls for $5+

Mosaic (MOS) hasn’t been on the VSL in a while due to its range bound nature. It’s rallied pretty hard, is overbought and is probably about fairly to slightly overvalued. It’s capital intensive and subject to interest rate risk. So, like Nutrien, which I like more, it’s time to sell some covered calls. 

TradingView Chart

  • Sell $45 January calls at the ASK.

AMD (AMD) is on the VSL and it’s overbought on the weekly and slightly overvalued on forward looking normalized cyclical earnings. Pretty easy to see this one settling back on more coming competition and margin contraction in the next year. Could have a puff of the cigar left, but if you’re risk averse, at least sell covered calls against a portion of the position. Remember, markets are always adjusting, so is the semiconductor market, it’ll just take some time.

TradingView Chart

  • Sell $130 January calls at the ASK.

Brookfield Asset Management (BAM) is a also on our list and has benefited greatly from inflation surge. But, look at the long-term chart. It’s not a big growth stock and has gotten ahead of itself on weekly RSI. With Fed Taper imminent, it’ll consolidate a bit. A good time to sell a covered call. 

TradingView Chart

  • Sell $65 December calls at the ASK. – there’s not much of an options market, so a trim makes a lot of sense here and possibly waiting for January options to be available. 

Cash-secured Put Ideas

Cazoo (CZOO) just keeps growing. It’s going to do a Carvana (CVNA) Euro style (so probably half as good, but that’s still great). You really want to own this. If you own some, sell cash-secured puts. If you don’t buy a starter and sell cash-secured puts. 

  • Sell $7.50 January puts for $1+

Ford (F) speaking of cars, sell puts on this if you don’t have at least a 2% position. It’s going to ride like a Mustang named Lightning. In short, it’ll close the gap on Tesla over the next 5 years. 

  • Sell $15 January puts for $1+

Bristol Myers (BMY) for all you dividend investors Bristol Myers is screaming sell a put to collect your premiums (which is more than a dividend). The top of the buy zone is $54 so that’s your bogey for first assignment next price after premiums. BMY is starting to base, so I’m comfortable getting started with a cash-secured put. If it falls below $54 then either sell another put or add some stock. 

TradingView Chart

  • Sell January $55 puts for $1+

WeWork (WE) is a real thing. Really. People still work in offices. And, as I discussed months ago, they are moving to be more and more enterprise customer based. WeWork is simply undervalued with projected growth. If the world approaches normal the next couple years and corps stick with spread-out workforces, then this is a double or triple fairly fast.

  • Sell $10 December put for $1.25+

Jumia (JMIA) is attractive again. It’s really building a base and it has massive upside someday. I really like selling puts on this over and over until a starter position becomes a half position. That’s all I’ll want though as I still intend to buy an emerging markets fund eventually. 

TradingView Chart

  • Sell $17 January puts for $2+(I have entered this trade today)

AT&T (T) I know you still hate this downward drifter too. But, me and shooter both see $23-24 as an absolute bottom area. Plus, some big fish are clearly accumulating shares from the weak “dey took me divident” crowd. I think AT&T is underpriced by around $130 billion. It’s market cap is down to $181 billion. It’s roughly a double from here. You really can’t ask for much more margin of safety intermediate term.

  • Selling January $25 cash-secured put for $1+ (I presume you own this, if you don’t, also buy a starter position). I’m selling January because I expect any rebound to occur after tax-loss selling.

Discovery (DISCA) is undervalued by about half as well in my opinion. The coming deal with Warner will make it the biggest content provider on the planet and it will have the broadest international reach. I see a very Netflix (NFLX) type ride with this one someday.

  • Selling January $22.50 cash-secured puts for $1+. I’m selling January because I expect any rebound to occur after tax-loss selling.

ViacomCBS (VIAC) keeps moving in the right direction on streaming revs and I can’t imagine them not doing a strategic deal (something with Comcast (CMCSA) with NBC seems inevitable to me). If you are a dividend investor, you should be moving towards having a full 4% position here.

  • Selling January $37.50 cash-secured puts for $2+

Ontrack (OTRK) I know you hate it. Get over it. They’re priced for Armageddon and have government contracts. They ain’t going nowhere. When a company is priced for Armageddon ask one question: will it be here in five years. If the answer is yes, buy it. Technical indicators s started moving in the right direction the past month.

  • Selling January $7.50 cash-secured puts for 75¢+

Stone Co (STNE) Berkshire is a heavy investor in this Brazilian fintech. Early mover advantage, back to near IPO prices. Stone Co reminds me of Square (SQ). Somebody bought a bunch late last week. Potential triple or better from here. Take a starter position (I already have one) and…

  • Sell $37 January cash-secured puts for $3+

Fast Acquisition (FST) is moving fast in a fast moving online gaming world. Their deal with DraftKings (DKNG) is a big deal and hints at more M&A as companies like MGM (MGM) have sold off their real estate. Please own this stock!

  • Selling January $12.50 cash-secured puts for $1.50+

Palantir (PLTR) is still a bit hard to decipher, but they keep making deals for their AI and analytics services with governments and big business. It’s hard to see this one not beating the markets over time, the only question is can it be a multi-bagger from here. I suspect yes as it is consolidating much like MP Materials while it builds.

  • Selling December $25 cash-secured puts for $2.50+

Ginko Bioworks (DNA) Raised strike price from $10 to $11 because there’s a lot of interest in this biotech platform company. I tried to put you on a while back. If you waited, you should get a chance to buy this platform genetic research company soon, or at least sell a cash-secured put.

  • Sell January $11 cash-secured put for $2+

Heron Therapeutics (HRTX) continues to expand its indications for its anti-opiate solution. Again, this company has strong smart hands involved as investors. Learn what ZYNRELEF is. Remember, Purdue Pharma and oxycodone? That’s what they’re target market is. These guys could become that big without selling opiates.

  • Sell $11 December $10 cash-secured puts for $1+

Aemetis (AMTX) is a big winner with higher energy prices and clean energy regs continuing to get tighter. They had a bit of profit taking late last week. I am trying to sell more puts as I only have had a small taste of this on so far. The more I learn, the more I like. I want to own shares on pullbacks. The November’s got executed last week for me, you can try to sell those as well if you like, per chart below. Mind your asset allocation.

  • Sell $17.50 January cash-secured puts for $2.50+

Sirius XM (SIRI) continues to build a global case. I really like selling puts here along with a position in Liberty Sirius (LSXMK) which is a significant Berkshire holding as well. Their subscription revenue potential is huge now that they are global via streaming vs just satellite U.S.

  • Sell $6 January cash-secured puts for .50+

* and speaking of satellite stocks, all of the Satellite as a service stocks and AST SpaceMobile are priced to buy or sell puts if you don’t have half positions yet (about 2% of your NAV each).

Sustainable Growth

Bold = New (might be symbol, might be a price)

New charts are linked to company name.

*** more coming next week ***

CompanySymbolTOBZBFOption Ideas
Aemetis(AMTX)1711p Nov 17.5 > 1.50
Azure Power(AZRE)2418
Discovery(DISCA)4232p Jan 22.50 > 1
Enphase(ENPH)9780
Ford(F)1410p Jan 15 > 1
Heron Therapeutics(HRTX)1912p Dec 11 > 1
Jumia(JMIA)2719p Jan 17 > 2
Liberty Sirius(LSXMK)4038
MP Materials(MP)3116p Jan 30 > 3
Micron(MU)6139
OpenDoor Tech(OPEN)2016
OnTrack(OTRK)2912p Jan 7.5 > .75
Palantir(PLTR)2521p Dec 25 > 2.50
Quidel(QDEL)132107
Solar Edge(SEDG)228182
Sirius XM(SIRI)76p Jan 6 > .50
SunPower(SPWR)2819
Stone Co(STNE)3630p Jan 37 > 3
Unity Software(U)116102

Recent SPAC Mergers To Own:

CompanySymbolTOBZBFOption Ideas
WeWork [BowX](BOWX)12.508p Dec 10 > 1.25
Cazoo(CZOO)12.508p Jan 7.50 > 1
Fertitta Entertainment [Fast](FST)1511.25p Jan 12.50 > 1.50
Ginko Bioworks(DNA)12.508p Jan 10 > 2
AST Spacemobile(ASTS)12.508p Jan 10 > 2
Satellogic [CF Acq](CFV)12.508no options market
Planet Labs [DMY Tech](DMYQ)12.508no options market
Spire Global(SPIR)12.508p Feb 7.5 > 1.5
BlackSky(BKSY)12.508p Feb 7.5 > 1.5

Dividend Collector

CompanyStock SymbolTOBZBFOption Idea
American Tower(AMT)246221
Bristol-Myers(BMY)5449p Jan 55 > 1
Crown Castle(CCI)152135
Compass Diversified(CODI)2721
Cisco Systems, Inc.(CSCO)4841
Walt Disney(DIS)151121
Barrick Gold(GOLD)2118
Icahn Enterprises, L.P. (K-1)(IEP)5752
Intel(INTC)5450
Kinder Morgan Inc(KMI)1615
Lockheed Martin Corporation(LMT)341317
Lumen Tech(LUMN)1311
Newmont Mining(NEM)5147
New Fortress Energy(NFE)2820
NRG Energy(NRG)3532
Nutrien(NTR)6148c Dec 75 > 1.25
Pfizer(PFE)4236
Seagate(STX)7163
Spectrum(SPB)6753
STAG Industrial(STAG)3531
Store Capital(STOR)3128
AT&T(T)3228p Jan 25 > 1
Viacom(VIAC)4841
Vici Properties(VICI)2724

Global Trends ETF

* No ETF ideas yet, I will fill the chart next week though.