Barron's: Selling Covered Calls
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Date updated:08-04-2007
From Barron's 8-6-07:
The Street's trading recommendations have less to do with traditional volatility trading, and more to do with fundamental analysis of stocks. Recommended strategies include selling puts on mega-caps (stocks with market values of at least $40 billion), selling calls and buying stock.
Michael Schwartz, Oppenheimer's chief options strategist, recommends selling slightly out-of-the-money calls against Dow industrial components to buy stocks at a potential discount. "Market swings are creating opportunities to sell richly priced options against stocks," Schwartz says. "Some premiums are as much as 100% more than you would normally receive for selling calls."
Returns range from 9.6% to 17%, with holding periods of up to about seven months. Some of the highest returns in his covered-call list include these stocks.
-
AA
Alcoa Inc - $12.12
- +2.19%
- $12.19
No Analysis added
-
GM
Gen Motors - $3.94
- +6.20%
- $3.81
No Analysis added
-
CAT
Caterpillar Inc - $45.80
- -0.61%
- $46.79
No Analysis added
-
AXP
Amer Express Inc - $21.07
- +5.61%
- $20.30
No Analysis added
-
JPM
Jp Morgan Chase C - $29.88
- +2.15%
- $29.79
No Analysis added
-
C
Citigroup Inc - $7.46
- +5.37%
- $7.29
No Analysis added
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