Perpetual Income Trade Alert: KHC, NTAP
With the market up today, we have several positions we can manage.
ROLL
Kraft Heinz (KHC): 38.85
Kraft goes ex-dividend on Monday, June 5, so we can only roll our call out one week in case the stock starts to run. Let’s roll our call out one week to the at-the-money strike for a solid premium.
ACTION: Roll the KHC 19 May 41 call to the KHC 26 May 39 call for a net credit of around 0.33 to 0.37.
Buy to close KHC 19 May 41 call
Sell to open KHC 26 May 39 call
COVERED CALL
NetApp (NTAP): 65.40
NetApp is scheduled to report earnings on May 31, so we have elevated premiums if we go out to June 2 to sell a covered call.
ACTION: Sell to open the NTAP 2 Jun 67 call for a net credit of around 1.40 to 1.45
NEW MEMBERS: Buy shares at market and sell the NTAP 2 Jun 67 call.
