Retirement Income Options: Caution In The Face Of Fed Taper

Summary

  • In general, we don’t want to fight the Fed.
  • Fed pain will be felt most with high debt, low growth zombie companies.
  • There are a handful of unloved growth stocks with cash on hand that are worth a nibble on the dips and to sell cash-secured puts on.
  • I gave a lot of covered call ideas the past couple months, let those ride out.
  • Here’s a few more covered call ideas to help you get through the volatility.

Retirement Income Options focuses on option selling ideas, i.e. cash-secured puts and covered calls, on our Plug & Play lists.

Make sure to read:

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 or chat and I will post an answer as fast as I can.

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

c = covered call p = cash-secured put

Covered calls are based on you already own the underlying and it having grown to a full position or greater, NOT a buy-write. We write covered calls on a portion of our position, not the whole, so that our winners can still run.

Conviction Trades

My conviction trades are those I am trying to make this week and execution can depend on price movements. These ideas are based upon the buy zones and oversold or overbought signals. Remember, I manage money for over 50 families, not every trade is appropriate for every investor. Consider which trades make sense for you based on your risk tolerance and goals. 

Use GTC trades and modify at least weekly or a bit more often. My price is the minimum to take, if the ASK is higher, try to get the ASK and walk it down a nickel at a time every 20 minutes. 

Covered Call Ideas

Opendoor (OPEN) I mentioned in last week’s RIO and again in this week’s SOTW. If you had sold the December $30 covered call for a buck, you’d already be profitable and could hold. As it stands, just wait for earnings now.

SunPower (SPWR) was in last week’s RIO and and this week’s SOTW. If you sold the rec’d call you’d be profitable already. I think you can still sell a little lower strike as I expect a choppy market for an extended period with Fed taper. 

Sell $38 January calls for about $2  

Nutrien (NTR) I suggested December covered calls the last two weeks and it came down to be profitable and is no longer in play. If NTR pushes up again soon, then $75 January’s would be in play. If you NTR calls sold, just them die slow deaths unless you need the cash.

Travel America (TA) keeps on truckin! This one has to take a breather soon. Very overbought and I know the business well, also overvalued. 

TradingView Chart

Trim a little and go ahead and sell covered calls again, bump them out to: 

  • Sell $65 December covered calls for 3+

AMD (AMD) if you didn’t sell covered calls, at this point just trim 50-80% of your position. Super overbought RSI and divergent MFI. Very dangerous parabolic chart. These last two, like many in the market are blow-off top charts. 

Liberty Sirius (LSXMK) Buffett bought more and every time it’s fallen back after. Sell covered calls against about 50% of your position. 

  • Sell $55 January for 2+

Ford (F) I hate to sell covered calls in general on my home run stocks, but I think it’s all getting ahead of itself. Very overbought on the weekly, but the Reddit Army Apes are involved here so can’t play too much defense.

TradingView Chart

I trimmed about 20% of my stock today, wrote a covered call against about 30% and sold puts to replace the stock a couple bucks down. Here’s the two option trades: 

  • Sell $21 January covered call for 2+  
  • Sell $18 January cash secured put for 1+

Cash-Secured Put Ideas

Opendoor (OPEN) I mentioned in last week’s RIO and again in this week’s SOTW. Waiting for earnings now. If it implies a rough winter, then we can sell some puts.

  • Sell 15 Jan puts for $2.50+

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. Still a good put.

  • Sell $9 January puts for about $1.50  

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! Still a good put.

  • Sell January $12.50 cash-secured puts for about $1.00 

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. This put has been out there 2 weeks now, it should come to you.

  • Sell January $55 puts for a $1

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.

  • Sell January $25 cash-secured put for $1+

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.

  • Sell January $22.50 cash-secured puts for $1+

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.

  • Sell January $37.50 cash-secured puts for $2.50+

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. Pushed this one out to January to collect more premium. Have a starter with this one.

  • Sell $10 January put for $2+ 

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.

  • Sell $17 January 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. Stock jumped on earnings. Still dirt cheap and getting played with by traders. Moving the put up a bit. For use with a starter.

  • Sell $10 January puts for $2+

StoneCo (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… I’m doing a write up on StoneCo that you’ll have for 2 days before free SA does. Get your starter and sell a put. It’s in the price range that Berkshire would buy more imo.

  • Sell $32 January cash-secured puts for $4+

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. I’m hoping it dips on earnings. Yeaaa, it dipped on earnings. Go get it! Pushed put out a month.

  • Sell $25 January cash-secured puts for $2.50+

Ginko Bioworks (DNA) 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. Again got away a little, go ahead and place this if you don’t have any, it might not get hit though before we have to push out a month or two.

  • Sell $11 January 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. This one keeps drifting away. Make sure to get a starter and sell a put on any down day.

  • Sell $11 December 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. Keeps running away, but energy is volatile, stick to this put.

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

Sirius XM (SIRI) continues to build a global case. Their subscription revenue potential is huge now that they are global via streaming vs just satellite U.S. The parent keeps moving, Liberty Sirius (LSXMK) which is a significant Berkshire holding as well, keeps moving, but this one barely budges. I’m just going to buy shares on the next dip. Have a starter on a dip.

  • Sell $6 January cash-secured puts for .30¢ 

Unity (U) is a case where you’re up 60-70% if you bought when I talked about it. It’s overbought and just had a parabolic run which I’m betting is a false breakout past old highs. Cathy Wood is part of this run up. Trim 20-30% of a position, but also set a cash-secured put to buy that part back 20-30% lower. 

TradingView Chart

  • Sell $140 January puts for 5+

Amplify Alt Harvest ETF (CNBS) an ETF we can get high on! I discussed this ETF in the Plug & Play ETFs. I’m looking to take starters very near here. And, also sell cash-secured puts. I have a buy limit at $18. 

  • Sell $19 December puts for $2+ (this strategy gives us buys at $18 and net cost of $17 if put to us). 

Sustainable Growth

* Ideas that don’t match above are other ideas or a week old. 

CompanySymbolTOBZBFOption Ideas
Aemetis(AMTX)1711p $17.50 Jan > 2.50
Azure Power(AZRE)2418
Discovery(DISCA)4232p 22.50 Jan > 1
Enphase(ENPH)9780
Ford(F)1410c 21 Jan > 2p 18 Jan > 1
Heron Therapeutics(HRTX)1912p 11 Dec > 1
Jumia(JMIA)2719p 17 Jan > 2
Liberty Sirius(LSXMK)4038
MP Materials(MP)3116
(MU)6139
OpenDoor Tech(OPEN)2016p 15 Jan > 2.50
OnTrack(OTRK)2912p 10 Jan > 2
Palantir(PLTR)2521p 25 Jan > 2.50
Quidel(QDEL)132107
Solar Edge(SEDG)228182
Sirius XM(SIRI)76p 6 Jan > .30
SunPower(SPWR)2819c 38 Jan > 2 
Stone Co(STNE)3630p 32 Jan > 4
Unity Software(U)116102p 140 Jan > 5

Recent SPACs:

CompanySymbolTOBZBFOption Ideas
WeWork [BowX](BOWX)12.508p 10 Jan > 2
Cazoo(CZOO)12.508p 9 Jan > 1
Fertitta Entertainment [Fast](FST)1511.25p 12.50 Jan >1
Ginko Bioworks(DNA)12.508p 11 Jan > 2
AST Spacemobile(ASTS)12.508p 10 Jan > 2
Satellogic [CF Acq](CFV)12.508no options market
Planet Labs [DMY Tech](DMYQ)12.508no options market
Spire Global(SPIR)12.508p 7.50 Feb > 2.5
BlackSky(BKSY)12.508p 10 Feb > 2.50

Dividend Collector

CompanyStock SymbolTOBZBFOption Idea
American Tower(AMT)246221
Bristol-Myers(BMY)5449p 55 Jan > 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 75 Dec > 1.25
Pfizer(PFE)4236
Seagate(STX)7163
Spectrum(SPB)6753
STAG Industrial(STAG)3531
Store Capital(STOR)3128
AT&T(T)3228p 25 Jan > 1
Viacom(VIAC)4841
Vici Properties(VICI)2724

Global Trends ETF

ETF EquitiesSymbolTOBZBFOption Idea
Invesco QQQ*(QQQ)319273
Invesco Wilderhill Clean Energy(PBW)7864
ARK Innovation(ARKK)9482
Invesco Next Gen 100(QQQJ)3025
Berkshire Hathaway(BRK.B)245222
iShares Semiconductor(SOXX)372296
Amplify Alt Plant Economy(CNBS)1914p 19 Dec > 2
Van Eck Rare Earth Metals(REMX)10383
Emrg Mkts Internet & Ecommerce(EMQQ)4939

Disclosure: I/we have a beneficial long position in the shares of pltr either through stock ownership, options, or other derivatives.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Have quite a few of these or similar. Remember, I manage OPM so it’ll be a little different depending on type of client.