Every once in a while, I like to do something a little different. For me, it means building portfolio ladders. 

What’s a portfolio ladder? The most common are bond ladders, where you build a portfolio of different bond maturities. You can also do this with different yields, etc. 

Another example of a portfolio ladder involves dividend yields, where you have a portfolio of dividend-paying stocks with different yields from low to high. 

However, I’m not suggesting that everyone should run out and do this for income generation. A stock’s yield is less important than its dividend growth over an extended period. But I digress. 

So, today, I’ve narrowed Wednesday’s unusual options activity to call options expiring in 100 days or more and available at net debits of $100 or less. 

Yesterday, twenty-seven call options met both of these criteria. They make an excellent start to building an inexpensive portfolio ladder. Here’s how. 

The Task at Hand

To build my portfolio ladder, I will select three stocks from the group of 27 with call option net debits from three different price ranges: $0 to $20, $21 to $40, and $41 to $60, all of them expiring in 100 days or more.   

I hope this makes sense. And off we go.

British American Tobacco (BTI) - $0 to $20

British American Tobacco (BTI) is one of the world’s largest cigarette producers, with brands such as Lucky Strike, Dunhill, Newport and Camel. However, recently, it’s moved toward non-combustible products through its Vuse vaping brand and Glo heated tobacco.  

I’ve followed it in recent years because of its Canadian connection to New Brunswick cannabis producer Organigram Global (OGI). BAT owns 30% of Canada’s largest cannabis company by market share. 

In April, it acquired Collective Arts, a leading provider of hemp-derived THC (tetrahydrocannabinol) beverages in the U.S. market. The $24 million acquisition gives it a platform for growth in the American cannabis market.  

The Sept. 19 $55 call had a Vol/OI (volume to open interest) ratio of 55.94, the second-highest call options expiring in 100 days or more. 

The call’s net debit of $20 is just 0.4% of its $55 strike price. Expiring in 121 days, you can double your money by selling the call before expiration if it appreciates by $2.72 (6.1%) over the next four months. 

The risk/reward is excellent.   

Haleon Plc (HLN) - $21 to $40

Haleon Plc (HLN) was created on July 18, 2022, by merging the consumer health businesses of GlaxoSmithKline (GSK), Novartis (NVS), and Pfizer (PFE). 

Its brands include Voltaren, Tums, Polident, Advil, Centrum, and many others. No drugstore can live without its products. 

Usually, you don’t get three healthcare companies chipping in their consumer health businesses if there’s above-average growth available. However, in 2024, Haleon’s organic sales grew 5.0%, generating adjusted operating profits of 2.5 billion British pounds ($3.35 billion), 9.8% higher than in 2023. 

It’s a lot more nimble than you would think. Perhaps that’s why its stock is up 30% over the past year, three times higher than the S&P 500. 

The Nov. 21 $12.50 call had a 2.60 Vol/OI ratio yesterday. The call’s net debit of $30 is 2.4% of its $12.50 strike price. Expiring in 185 days, its $12.80 breakeven is only 15.3% OTM (out of the money). 

You can double your money by selling the call before expiration if it appreciates by $1.13 (10.2%) over the next six months. The profit probability of 21.96% isn’t high, but the downside is minimal at a $30 outlay. 

Starwood Property Trust (STWD) - $41 to $60

Iconic real estate billionaire Barry Sternlicht took Starwood Property Trust (STWD) public in August 2009, selling 40.5 million shares at $20, investing the proceeds in commercial and residential real estate debt. 

Nearly 16 years later, its market cap of $6.51 is almost eight times greater than at its IPO, a CAGR (compound annual growth rate) of 13.3%. That doesn’t consider the $1.92 annual dividend it’s paid shareholders since 2014. Further, in 2010, its first full year as a public company, it paid its shareholders $1.28 a share in dividends. 

“We entered 2025 with significant financial flexibility, diversified business lines, and a solid investment portfolio that we expect to grow significantly this year, with commercial lending originations to date already surpassing all of last year,” Sternlicht stated in Starwood’s Q1 2025 press release. 

If income is your thing, Starwood is an excellent stock under Sternlicht’s direction. 

The Dec. 19 $21 call had an 11.20 Vol/OI ratio yesterday. The call’s net debit of $45 is 2.1% of its $21 strike price. Expiring in 213 days, its $21.45 breakeven is only 11.2% OTM. 

You can double your money by selling the call before expiration if it appreciates by $1.86 (9.7%) over the next seven months. 

On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.