In a previous article, “CME Buying CBOT”, we analyzed Chicago Mercantile Exchange’s (CME) purchase of CBOT (BOT) and we illustrated the profitability of the covered call strategy for CME.In article, “CME Covered Call Strategy Returns +3.9% in Nov.”, we selected covered calls positions for CME once again for stock options expiration in January and we also selected bull put credit spreads positions for CME for expiation in December. The December bull put credit spreads selected for CME returned an average of +5.8% in just 10 days!
We’re still bullish on CME and using PowerOptions powerful stock options tools to search for potential candidates returned the following bull-put credit spreads stock options position:
| Chicago Merc. Exch. Hldgs. Inc. (CME) $ 510.10 January Expiring in 24 Days | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sell Option |
Expre &Strike |
Bid | Buy Option |
Expire &Strike |
Ask | %Return | Net Credit |
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| CNMMP | 07 JAN 480.0 (24) | 1.8 | CNMML | 07 JAN 460.0 (24) | 0.7 | 5.8 | 1.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The bull put credit spreads positions selected for CME can be entered for $2000 per contract with a potential return of +5.8%, in only 24 days. As long as the price of CME remains above the short strike price at options expiration in January, the position will be fully profitable. If the stock price of CME closes below the short strike price of $480 at options expiration the position will not return the maximum profit and could potentially result in a loss, possibly a significant loss. If the stock price of CME is below $460 at stock options expiration, the position will essentially lose everything that was invested except the initial net credit of $110/contract.
Competitors:
Competitors for CME include: CBOT Holdings Inc. (BOT), Deutsche Borse AG (private), LIFFE (Holdings) plc (private), and Nasdaq Stock Market Inc. (NDAQ).
PowerOptions provides a free 14-day trial of its service. So join PowerOptions today, and you too can start reaping the benefits of the covered call investment strategy.PowerOptions provides Internet based tools for analyzing stock options with specific search criteria and for finding potentially lucrative option income. For those seeking to execute a covered calls stock options investment strategy or a bull-put credits spreads strategy for their personal portfolios, PowerOptions provides an Internet based search engine for finding potentially lucrative income producing stock options positions.
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[tags]Deutsche Borse AG, LIFFE (Holdings) plc, BOT, CBOT Holdings Inc., CME, Chicago Merc. Exch. Hldgs. Inc., NDAQ, Nasdaq Stock Market Inc., bull-put credit spreads, covered call investment strategy, investment strategy, iron condor, option income, poweroptions, selling naked puts, stock option trading, stock options[/tags]