Top Trades for Fri, 10 Jun 2022 12:47 – IBM and CIM


    China/Tommy – Vaccines work, people will get mild cases and move on with their lives.  It's simply not practical to hide out from Covid as it's not like it's going to go away and stop bothering people.  

    MDT/Tully – They only pay 3% and they are too volatile.  IBM is our Stock of the Year and still stubbornly at $135 (because it's so great) and pays a lovely $6.60 per $135.78 share (4.7%).  You can buy the stock and sell the 2024 $125 calls for $25 and that nets you in for $110.78, called away at $125 with a 14% gain in 18 months plus the dividend – better than keeping it in the bank and, if they drop 20% to $108, you can sell the 2024 $100 puts (now $8.65) for what the $125 puts are $14 or better and then your net is $96.78.  

    And, of course, there's CIM at $9.57, who pay a $1.32 dividend (13.4%) and you can buy those shares and sell 2024 $10 calls for 0.80 and the 2024 $8 puts for $1.50 and then you are in for net $7.27, called away at $10 with a $2.73 (37.5%) gain and collecting 0.33 (4.5%) PER QUARTER while you wait.  How can you not love that?