Perpetual Income Trade Alert: IBM, OKE
We have one more position to manage before the weekend and another that is on track to expire worthless.
IBM (IBM): 125.53
Our IBM 21 Apr 136 call is on track to expire worthless. We will sell another call after the stock trades higher for at least three successive days.
ACTION: Let IBM 21 Apr 136 call expire worthless.
ROLL
ONEOK (OKE): 66.20
ONEOK just announced a quarterly dividend of 95.5 cents a share, in line with the previous quarter, but the surprise was that the ex-dividend date is on April 28.
Our OKE 21 Apr 65 call is in the money. With only monthly options, we can roll out to the same strike ahead of the ex-dividend date to collect a credit, but we would mostly likely be called out of the stock at $65 next week.
However, if we roll out and up to the 67.50 call, we’ll spend about 0.45, but we can pick up an additional 2.50 in potential capital gains and still earn a 95.5-cent dividend, which puts us ahead in net income.
ACTION: Roll the OKE 21 Apr 65 call to the OKE 19 May 67.50 call for a net debit of around 0.43 to 0.48
Buy to close OKE 21 Apr 65 call
Sell to open OKE 19 May 67.50 call
