Retirement Income Options 2/9/2021

Summary

  • Selling cash-secured puts on SPACs isn’t really viable yet.
  • Most stocks on our watchlists are overbought or near overbought on the weekly RSI meaning you should be trimming and/or selling covered calls.
  • There are a handful of stocks in our buy zones and/or oversold on weekly RSI that you should be selling cash-secured puts on.

The weekly Retirement Income Options is a simplified piece to give you actionable option ideas for today and tomorrow. Make sure to read the Retirement Income Options primer before getting started. 

Read our various articles for fundamental outlooks, investment thesis and “buy zone” chart updates.

Technical Overlay

We always start with a technical overlay to give us an idea where to look for ideas. I use the TradingView stock screener to quickly scan the weekly overbought and oversold signals.

  • Stocks with a weekly RSI around or over 70 are covered call candidates.
  • Stocks with weekly RSI around 40 or below are cash-secured put candidates.

TradingView Screener Expanded VSL Results 2/9/2021: 

Snapshot of overbought…

Snapshot of oversold…

I also use BarChart’s Option Screener to filter ideas.

Barchart Plug & Play Covered Call ideas:

Barchart Plug & Play Cash-secured Put ideas: 

Covered Calls To Sell This Week

I’m focused on stocks that we have bought or that appeared on the Plug & Play stock lists this quarter or recent quarters. Generally look to get the “ask” price or a little better unless noted.  

SunPower (SPWR) March $55

Micron (MU) March $85

Freeport McMoran (FCX) March $35

Invesco (IVZ) March $23

Cisco (CSCO) March $50

Cash-secured Puts To Sell This Week

I’m focused on stocks that we want to buy and that appeared on the Plug & Play stock lists this quarter or recent quarters. Generally look to get the “ask” price or a little better unless noted.

Barrick Gold (GOLD) March $21 gtc $1

Ford (F) March $11 gtc 50¢

Lumen Tech (LUMN) March $12.50

Kinder Morgan (KMI) March $15

AT&T (T) March $30

Merck (MRK) March $75

Pfizer (PFE) $34 gtc $1

Rare Combo Trade

MP Materials (MP) is a stock that we are trying to accumulate based on long-term outlook and the current consolidation pattern in the stock.

https://www.tradingview.com/x/ac72XsiR/

Here is a strategy for accumulating and bringing in income. 

Buy a starter position in MP.

Then, sell the March $35 calls.

Simultaneously sell the March $30 puts. 

This is a rare buy-write for us, but, we are adding a cash-secured put as well.

The “worst case” is that the stock rises past $35 and the stock is called away profitably while you keep both premiums. In that case, we would look for another entry paired with a cash-secured put.

Ideally, the stock stays range bound, between $30-$35, with both options expiring the money in your pocket, while you keep the stock. In this case we would sell another cash-secured put.

This Week’s Retirement Income Options Webinar

Disclosure: I am/we are long T, KMI, LUMN, MP, F, GOLD.