The stock prices of companies manufacturing and selling fertilizer have been blasting off over the previous year. When most people hear about fertilizer they think about the smelly byproduct stuff from animals. But a large majority of fertilizer is manufactured from natural gas and the price of natural gas is cheaper than it was a year ago. Fertilizer manufacturers have benefited from the lower prices for natural gas.
Ethanol has been hot as of late and ethanol is made from agricultural products, and you guessed it, require fertilizer for increasing yields, so the demand for fertilizer has also increased, helping the profit margins of fertilizer manufacturers. Additionally, the increase in the world’s population with lots more mouths to feed has also been a boon to the fertilizer manufacturers.
Fertilizer manufacturers are in a sweet spot, demand for their products are up significantly and costs have decreased, and there’s no hint of this environment changing anytime soon. The fertilizer manufacturers are looking bullish, and using PowerOptions powerful stock options search tools we found the following covered calls positions for fertilizer manufacturers:
| SmartSearchXL covered call search | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Sym |
Stock Price |
Option Sym |
Expire &Strike |
Opt Bid |
%Dnsd. Prot |
%If Unch. |
%If Asgnd. |
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| POT | 158.04 (+7.42) | PVZDK | 07 APR 155.0 (45) | 10.60 | 6.7 | 5.1 | 5.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| POT | 158.04 (+7.42) | PVZDJ | 07 APR 150.0 (45) | 13.60 | 8.6 | 3.8 | 3.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AGU | 38.26 (+0.73) | AGUDG | 07 APR 35.0 (45) | 4.20 | 11.0 | 2.8 | 2.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AGU | 38.26 (+0.73) | AGUDH | 07 APR 40.0 (45) | 1.35 | 3.5 | 3.7 | 8.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CF | 38.78 (+0.08) | CFDH | 07 APR 40.0 (45) | 1.85 | 4.8 | 5.0 | 8.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CF | 38.78 (+0.08) | CFDG | 07 APR 35.0 (45) | 4.80 | 12.4 | 3.0 | 3.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MOS | 25.73 (+0.25) | MOSDE | 07 APR 25.0 (45) | 2.05 | 8.0 | 5.6 | 5.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TRA | 17.71 (+0.20) | TRADW | 07 APR 17.5 (45) | 1.20 | 6.8 | 6.0 | 6.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The %if unchanged covered call potential returns range from 2.8% to 6% (45 days) for these positions. The %if unchanged return is the return realized at stock options expiration if the stock price is the same as when the position was entered.
The %if assigned returns for these positions range from 2.8% to 8.4%. To realize the %if assigned return for an out-of-the-money position, the stock price of the respective company must increase to or above the strike price of the call option.
The downside protection of these positions range from 3.5% to 12.4%. Covered calls positions allow the stock price of a stock to decrease slightly and still remain profitable. As long as the stock price does not decrease more than the downside protection at stock options expiration, the position will remain profitable.
Competitors:
Competitors for POT include: BASF AG (BF), Mosaic Co. (MOS), Yara International ASA (private), Agrium Inc. (AGU), and Terra Indus. Inc. (TRA).
Competitors for AGU include: Potash Corp. of Saskatchewan, Inc. (POT), Terra Industries Inc. (TRA), Yara International ASA (private), CF Industries Hldgs. Inc. (CF), and Mosaic Co. (MOS).
Competitors for CF include: Agrium Inc. (AGU), Terra Industries Inc. (TRA), and Koch Industries, Inc. (private).
Competitors for MOS include: Agrium Inc. (AGU), Potash Corp. of Saskatchewan, Inc. (POT), and Yara International ASA (private).
Competitors for TRA include: Agrium Inc. (AGU), CF Industries Holdings Inc. (CF), and Potash Corp. of Saskatchewan, Inc. (POT).
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[tags] Yara International ASA, Koch Industries, Inc., AGU, Agrium Inc., CF, CF Industries Hldgs. Inc., MOS, Mosaic Co., POT, Potash Corp. of Saskatchewan Inc., TRA, Terra Indus. Inc., covered call investment strategy, investment strategy, iron condor, poweroptions, stock option trading, stock options [/tags]