Selling MOS puts for income.
The Mosaic Co. (MOS) is a producer of phosphate and potash fertilizer.
Russia’s invasion of Ukraine has reduced the world’s food supplies making it necessary for farmers in other regions to increase crop yields.
This naturally increases demand for fertilize, driving shares of MOS higher.
The company his expected to turn profit of $10.73 per share next year.
With its current stock price near $53, MOS is trading for less than 5 times expected earnings.
This valuation should support the current stock price and help drive shares higher.
Meanwhile, heightened volatility causes higher option prices, giving us more income from our put-selling strategy.
By selling the October $50 puts near $2.15, we’re able to collect an annualized yield near 41%, while also giving us roughly $2.90 per share in cushion between the current market price for MOS and our strike price.
- Sell (to open) 1 MOS October 21st $50 put
- Limit: $2.15 or more
- The new position will represent roughly 5.7% of our model.
- Executed 14:17
- SOLD 1 MOS Oct 21 $50 Put @ $2.23