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I love to write puts on stocks when there is panic in the market and severe sell-offs. That’s when I can I take advantage of it to collect some option premium on a high-quality stock. Which is just what I’m recommending today, in the form of a naked put write on Kraft Heinz Co (NASDAQ:KHC):

Sell to open the KHC June 15th $50 put at about $0.35.

For those who might not be as familiar, a naked put write is a bullish position in which you collect upfront income and ultimately expect the price of the underlying stock to increase. While many stocks are overpriced right now, in certain sectors, earnings are not as far from valuations, and that’s what attracts me to this position.

KHC is down about 50% in the past year or so, and actually it’s a safety investment in the consumer staples sector. So, I’m expecting the company to be pretty stable. And it looked like the shares were close to a bottom, to where it’s unlikely to drop another five points. As long as Kraft Heinz stock does remain above $50, we’ll walk away with full profits on this position.

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Ken Trester is editor of the popular Maximum Options program. Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990.