Please Note: These recommended trades only apply to those Personal Finance Income Plus members who already have positions in the mentioned stocks and covered calls. Do NOT do these trades as initial positions.

1. Horizontal Spread Roll of Enterprise Products Partners (NYSE: EPD) to March

and

“Sell to Open” March $52.50 Call

Option Symbols: EPD121222C52.5 and EPD130316C52.5

Limit Order Price: Net credit of $0.60 or more ($60 per spread)

If your broker doesn’t allow option spreads, then you’ll have to do two separate single-option trades:

(a) “Buy to close” December $52.50 call for a debit of $0.05 or less ($5 per contract)


(b) “Sell to open” March $52.50 call for a credit of $0.65 or more ($65 per contract)

Directional View for Underlying Stock: Neutral to bullish

Personal Finance Portfolio: Income

•    Tell your broker:

For a horizontal spread (preferred):

I’d like to enter an option spread order on Enterprise Products Partners (EPD) stock. Specifically, I want to buy to close the December $52.50 call and sell to open the March $52.50 call for a net credit of $0.60 per share or more.

• For a two-part trade:

I’d like to buy to close the December $52.50 call on Enterprise Products Partners (EPD) stock for a debit of $0.05 per share or less.

I’d like to sell to open the March $52.50 call on Enterprise Products Partners (EPD) stock for a credit of $0.65 per share or more.

Please note: The important thing is to achieve a net credit on the roll (i.e., both trades) of $0.60 or more. The specific limit prices of the individual “buy to close” and “sell to open” trades are just starting points and should be adjusted as needed, keeping the net credit of the overall roll in mind.

2. Horizontal Spread Roll of Chevron (NYSE: CVX) to March

and

“Sell to Open” March $115 Call

Option Symbols: CVX121222C115 and CVX130316C115

Limit Order Price: Net credit of $1.33 or more ($133 per spread)

If your broker doesn’t allow option spreads, then you’ll have to do two separate single-option trades:

(a) “Buy to close” December $115 call for a debit of $0.02 or less ($2 per contract)


(b) “Sell to open” March $115 call for a credit of $1.35 or more ($135 per contract)

Directional View for Underlying Stock: Neutral to bullish

Personal Finance Portfolio: Income

•    Tell your broker:

For a horizontal spread (preferred):

I’d like to enter an option spread order on Chevron (CVX) stock. Specifically, I want to buy to close the December $115 call and sell to open the March $115 call for a net credit of $1.33 per share or more.

• For a two-part trade:

I’d like to buy to close the December $115 call on Chevron (CVX) stock for a debit of $0.02 per share or less.

I’d like to sell to open the March $115 call on Chevron (CVX) stock for a credit of $1.35 per share or more.

Please note: The important thing is to achieve a net credit on the roll (i.e., both trades) of $1.33 or more. The specific limit prices of the individual “buy to close” and “sell to open” trades are just starting points and should be adjusted as needed, keeping the net credit of the overall roll in mind.

3. Horizontal Spread Roll of Genesis Energy LP (NYSE: GEL) to March

and

“Sell to Open” March $35 Call

Option Symbols: GEL121222C35 and GEL130316C35

Limit Order Price: Net credit of $0.95 or more ($95 per spread)

If your broker doesn’t allow option spreads, then you’ll have to do two separate single-option trades:

(a) “Buy to close” December $35 call for a debit of $0.45 or less  ($45 per contract)


(b) “Sell to open” March $35 call for a credit of $1.40 or more ($140 per contract)

Directional View for Underlying Stock: Neutral to bullish

Personal Finance Portfolio: Income

•    Tell your broker:

For a horizontal spread (preferred):

I’d like to enter an option spread order on Genesis Energy (GEL) stock. Specifically, I want to buy to close the December $35 call and sell to open the March $35 call for a net credit of $0.95 per share or more.

• For a two-part trade:

I’d like to buy to close the December $35 call on Genesis Energy. (GEL) stock for a debit of $0.45 per share or less.

I’d like to sell to open the March $35 call on Genesis Energy (GEL) stock for a credit of $1.40 per share or more.

Please note: The important thing is to achieve a net credit on the roll (i.e., both trades) of $0.95 or more. The specific limit prices of the individual “buy to close” and “sell to open” trades are just starting points and should be adjusted as needed, keeping the net credit of the overall roll in mind.

Price Adjustment Regarding These Roll Trades

Unlike the opening of an initial trade, the Genesis Energy horizontal spread trade involves closing an in-the-money call option before it gets automatically exercised against us. Consequently, we do not have the luxury of patience and possibly passing on the trade (unless you are willing to sell your GEL stock). We will need to be flexible with our limit prices and adjust them if necessary as we get nearer to the market’s close on Friday, Dec. 21.

The limit credit price I suggest above for GEL is a starting point. If it doesn’t fill within a few hours, I recommend adjusting the limit credit price down by a few cents per share and waiting a few hours. If this adjusted limit price doesn’t fill, adjust again by a few more cents. Repeat the process until you get filled.

For the other two horizontal spread trades (EPD, CVX), there is less risk of having the underlying stock called away because the stock prices are currently below the call strike prices. As such, you can be more stubborn about your limit prices for the roll credits. If the limit credit prices don’t fill, you can wait until next week to sell March covered calls.