Yesterday, the markets rallied strongly which gave a nice boost to our positions in Tesla Motors (TSLA) and the iShares Russell 2000 ETF (IWM) . The breakout from the range that occurred Tuesday continues today.
In terms of things to do now, I like revisiting a recent yield idea. On Jan. 11, I suggested selling Williams Companies (WMB) Jan. 20, $28 puts. The put sale worked out, with sellers getting to keep the premium received.
I continue to think that gaining exposure to WMB below the $29 price that investors shelled out for shares in its recent secondary offering is a good way to earn income. You get paid to wait in terms of the dividend and can collect premium by selling options.
Here's a chart of WMB showing the selloff that occurred on news of the secondary pricing in the hole (below market prices at the time).
Since then the news on pipelines continues to be favorable. Yesterday, President Trump has supported the development of the Keystone XL and Dakota Access pipelines.
Oil companies have continued to make deals in leading shale areas. I believe that oil is in the midst of a multi-year resurgence as it recovers from the selloff that began in the summer of 2014.
One factor that could keep a lid on the oil price recovery is a ramp-up in domestic crude oil production from shale producers. Yet, if that does occur, two beneficiaries will be low-cost shale producers and pipeline companies.
I suggest buying WMB and selling the WMB May 19 $29 calls against it.