Selling CF puts and MU puts for income.
As the war in Ukraine continues to push grain prices higher, fertilizer prices are also rising. CF Industries manufactures low-cost nitrogen fertilizer that farmers need to ensure bumper crops that meet demand.
Shares of CF have been trending higher and should hold their value thanks to strong profits this year and next.
Meanwhile, a pullback in tech stocks has pushed shares of chip maker Micron Tech (MU) lower. Still, the company is extremely profitable and the stock trades at a very low valuation compared to earnings per share.
I expect MU to find support as it has in the past, and trade higher as value investors start to buy.
By selling the CF May $97.50 puts near $4.50, we’re able to collect an annualized yield near 37%, while also giving us roughly $6.50 per share in cushion between the current market price for CF and our strike price.
- Sell (to open) 1 CF May 20th $97.50 put
- Limit: $4.50 or more
- The new position will represent roughly 9.6% of our model.
~~~~~~~ - 14:02 Executed
- Sold 1 CF May 20th $97.50 Put @ $5.10
ALSO
By selling the MU May $72.50 puts near $3.35, we’re able to collect an annualized yield near 37%, while also giving us roughly $2.00 per share in cushion between the current market price for MU and our strike price.
- Sell (to open) 1 MU May 20th $72.50 put
- Limit: $3.35 or more
- The new position will represent roughly 7.3% of our model.
~~~~~~~~ - 14:02 Executed
- Sold 1 MU May 20th $72.50 Put @ $3.50