Tuesday, June 14, 2022

Are call buyers too optimistic?

Underlying Security Symbol: WMT, ADM, AEM, DVN

 

 Although these market swoons are very painful, I have no choice but to continue to work the portfolio for income. I did put a little cash in a 3 year treasury ladder, I had some DVN assigned last week and I have to put that money to work.

I looked at many call possibilities and I am sharing them with you today.  If the call buyers are right, these stocks should provide nice income now and in the future.  However, it is important to realize most call options expire worthless.  So you have to be happy owning the underlying stock in case you are not called away.

RETAIL:  A beaten down segment, consider  WMT

 



 

 

 

 

 

 

 

 

 

 

 

 FOOD:  ADM is a good consideration



 

 

 

 

 

 

 

 

 

 METALS:  AEM gold is a traditional hedge for inflation



 

 

 

 

 

 

 

 

 

ENERGY:  Still the favored sector consider DVN


 

 

 

 

 

 

 

 

 

 

 

Call premiums can be volatile so check the prices you can get through your trading broker.  I am constantly amazed at the resilience of the call options market.  Very different from 2008.  Are these call buyers too optimistic?  Time will tell.  These are some ideas to keep you occupied thinking of positives the market has to offer rather than watching your portfolio value go down.

 

MM MoneyMadam Data from Schwab.com and Marketxls

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