This is the time of month for a quick hit, 10 days before option expiration. My favorite time of the month. Here are three companies that you can own for a short-term covered call trade and pick up some nice money. Take care and put some stops in to protect yourself, chances are if the stock trades lower all the premium will be gone from the option anyway, diminishing your risk if you have to buy them back.
Sturm Ruger (RGR)--engages in the design, manufacture, sale and export of firearms in the United States. The company offers single-shot, autoloading, bolt-action, and sporting rifles; over and under shotguns; rim fire autoloading and center fire autoloading pistols; and single-action and double-action revolvers under the Ruger brand name. It also manufactures and sells accessories and replacement parts for its firearms. The stock is at $29.95 so let's look at a straight premium play. If it opens up flat on Monday Dec 5, then write the Dec 30s at a limit price of $1.15 and see if you can get filled there. It's a 3.83% premium for 10 days. Nothin wrong with that. For some reason if you don't get called away, I am sure when the time comes the January 30s will pay you handsomely again.
ABB Ltd (ABB)--provides power and automation technologies for utility and industrial customers worldwide. The company's Power Products division manufactures and sells high- and medium-voltage switchgear and apparatus, circuit breakers, power and distribution transformers, and sensors. ABB's Power Systems division provides integrated power and automation solutions for power generation plants; alternating current (AC) and direct current (DC) transmission systems; and flexible alternating current systems technologies. It also offers land and submarine cables, as well as accessories and services for medium- to high-voltage AC and DC systems; air- and gas-insulated substations; and network management solutions to help manage power networks. In addition, this division offers support agreements and retrofits to spare parts, service, consulting, and training; and undertakes analyses and design of new transmission and distribution systems. The company's Discrete Automation and Motion division manufactures and sells motors, generators, variable speed drives, programmable logic controllers, rectifiers, excitation systems, robotics, and related services for a range of applications in factory automation, process industries, and utilities. Its Low Voltage Products division provides protection, control, and measurement for electrical installations, enclosures, switchboards, electronics, and electromechanical devices for industrial machines, plants, and related services. It also makes building control systems for home and building automation. The company's Process Automation division offers integrated process control and instrumentation systems, plant electrification systems, information management systems, and industry-specific application knowledge for industries, such as pulp and paper, minerals and mining, metals, chemicals and pharmaceuticals, oil and gas, turbocharging, power, and marine. The company is immense with a $47B market cap. The stock is $18.63. Here is the play: The Dec 19s are $.40, which represents a 2.1% premium. If you lose it at $19, you sock away 3.86% for 10 days. The stock has had a hard time holding $19, so I am ok if you don't lose it in 10 days; January has a nice premium as well.
Hecla Mining (HL)--together with its subsidiaries, engages in the discovery, acquisition, development, production, and marketing of silver, gold, lead, and zinc. The company produces lead, zinc, and bulk concentrates and sells them to custom smelters; and unrefined gold and silver bullion bars, which it sells to precious metals traders. It holds 100% interest in the Greens Creek operating unit located near Admiralty Island in Alaska; and 100% interest in the Lucky Friday operating unit located in Idaho. The stock is $5.97 and this is a straight premium play. Sell the Dec 6 calls for $.25 and grab a 4.2% premium for 10 days. I have done Hecla calls for years, and it's a great write. January will be no different if you are not called away.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
No comments:
Post a Comment