The Federal Reserve has spoken. It plans to begin raising interest rates in March, which is also when it plans to wrap up its bond purchases. Stocks are rebounding today after turning sharply lower following the announcement, erasing Wednesday’s early gains.
That’s not to say the market has put in a bottom. We still have the Russia/Ukraine conflict, omicron, Apple’s (AAPL) earnings after the close, volatility in the bond market and the crypto crash to contend with. But we will continue to trade through whatever the market throws at us and take advantage of elevated volatility wherever possible.
I am recommending we roll our Ford (F), Kroger Co. (KR), Pfizer (PFE) and Walgreens Boots Alliance (WBA) puts out one week to buy time and generate some more income. Prices are jumping around and spreads are wide, especially with Ford. Please work your limit orders to make sure the trades go off.
F Jan Week Four (1/28) 25 Put
Current Stock Price: $20.04
Cash in Hand: $0.54
Action:
- Buy to close the F Jan Week Four (1/28) 25 Put for around $5.10
- Sell to open the F Feb Week One (2/4) 25 Put for around $5.10
- Set initial credit limit at $0, but adjust as needed to roll today
New Cash in Hand: $0.54
KR Jan Week Four (1/28) 48 Put
Current Stock Price: $45.43
Cash in Hand: $0.61
Action:
- Buy to close the KR Jan Week Four (1/28) 48 Put for around $2.59
- Sell to open the KR Feb Week One (2/4) 48 Put for around $2.75
- Set initial credit limit at $0.16, but adjust as needed to roll today
New Cash in Hand: $0.77
PFE Jan Week Four (1/28) 55.50 Put
Current Stock Price: $54.15
Cash in Hand: $1.55
Action:
- Buy to close the PFE Jan Week Four (1/28) 55.50 Put for around $1.47
- Sell to open the PFE Feb Week One (2/4) 55.50 Put for around $2.05
- Set initial credit limit at $0.58, but adjust as needed to roll today
New Cash in Hand: $2.13
WBA Jan Week Four (1/28) 53 Put
Current Stock Price: $50.37
Cash in Hand: $0.59
Action:
- Buy to close the WBA Jan Week Four (1/28) 53 Put for around $2.62
- Sell to open the WBA Feb Week One (2/4) 53 Put for around $2.76
- Set initial credit limit at $0.14, but adjust as needed to roll today
New Cash in Hand: $0.73