Rocky’s Weekly Stock Picks

This week we’re going to be giving our picks for call spreads. We’ll be looking for ITM spreads with a low cost of entry. But which ones?

Looking for dividends just seems, sort of lazy. Largely because this week we’ve got ex-divs for GOOD, GLAD, LAND, etc. That’s not so say we’ll be neglecting our income-generating investments, nor is it to suggest that you should forego picking up shares of any monthly-paying securities that tickle your fancy.

Actually, the Aberdeen Japan Equity Fund, JEQ, has an ex-div this week, with a yield of 20%. As with many of these exceptionally high yields we’re seeing across the board, that’s a reflection of the price drops and the actual return certainly won’t be that high. At the least it won’t be sustained over time.

ACVF and EIDO are worth mentioning, as well. Two of our favorites (and this editor’s personal favorites) that have held up exceptionally well in the past few weeks.

1. MNDY - $106.25 a share, monday.com is an Israel software company. This certainly doesn’t raise any red flags. Options trade monthly, and the strikes are $5 apart. Both of our analysis tools show a likelihood of being able to buy $45 and sell $50 calls, for $490 at entry.
   
   2% return a week isn’t a bad thing, and still beats any dividend over a year. Plus, Israeli technology is like half of American “defense”. Additionally, they just so happen to have a headquarters in Kiev. We’re not interested in connecting dots (in this article), but we aren’t going to pretend not to see a stable security when we see it. Furthermore, both of our analyses show identical figures. That nearly never happens, regardless of if the market is open or not.

   Maximum profit can be realized if the share price closes at $50 on Friday. Tempting.
   

   There’s potentially some juicy spreads as we move up in strike, but it’s time to move on.
   

2. MARA - $11.39 a share, Marathon Digital is a company similar to RIOT, heavily invested in mining Bitcoin and Ethereum, as well as developing blockchain technology. Upward movement is expected…highly expected, because math reasons. (We’re going with Marathon. Doing call spreads on securities we’re rolling covered calls on can get messy.)
   
   We’re going with $9/9.5 vertical, $39 entry cost. If you’re using Robinhood, though, there’s no contract fees so it might be wiser to do $8/8.50.
   

3. SYY - $84.73 a share, ex-div isn’t until June 30. Good things come from Sysco. We’re going to play $76/77 vertical call (Buy $76, sell $77), at an entry cost of $90. That’s about 7% return after commission. Or, 10% with Robinhood. Of course, that’s subject to change when the opening bell rings.
   
   

4. GREE - $5.19 a share, $2.50 strike spreads. Greenridge Generation isn’t one we normally touch. Their business is Bitcoin and energy generation. We’re basically going to take a gamble on this one, if -if- we can get in at $40, which it appears might be possible with a queued order. $2.50/$5.00 call debit could yield over $200.
   
   We’re not counting on that. In fact, we’ll be watching this play closely and be ready to bail at $50. Basically if we don’t win early Monday, we’ll be trying to close it quick.
   

5. NOK - $4.87 a share, Nokia is a nice, stable ADR with weekly options (and apparently a dividend now). $4.50/$5.00 can be entered at $33. $17 pretty much guaranteed profit.
   
   On the other hand, $5/$5.50 is only $4 to enter. We can’t do both (That would mean trying to buy and sell the same contract at the same time. This might be doable with an account that can short uncovered options, we’re not sure.)
   
   If we can get the $4 entry cost locked in for a $4.50/$5.00 call spread, we’ll do that. At the same time, we’ll do the $4/4.5 vertical call for next week. We’ll have to be a little bit more patient, but we get $18 instead of $17. $1 is what we get rolling calls on Robinhood.

   (It’s entirely possible to roll calls for $1 on other platforms, but after the contract fee and eventual tax, it’s underwhelming. Spreads take two contracts, so we’re looking at $2.60 just to complete the trade).

It seems like none of the YouTube money folks have discussed Robinhood for taking $1 profit at a time very much, if at all. “Oh but the taxes!” you hear your friends say.

Thing is, we’re not institutional investors, and we’re not trading for anyone but ourselves. From the stance of an average working American, it doesn’t make sense for us to make less money just to avoid taxation. That would be dumb.