PowerOptions WeBlog identified several successful trades for the option expiration month of January. Below is a table showing some of the successful trades identified.
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An audio podcast of this article is available at: poweropt.com/podcasts/2007_01_22_JANProfits.mp3
| Covered Call Profits – Maybe Not Faro Off | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock | Option | Stock Price |
Date | End Price |
Date | Pot. Profit |
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| FARO | QEJAX | $22.02 | 12/13/2006 | $25.05 | 1/19/2007 | 6.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2%-12% Returns In Less Than 1 Month | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock | Option | Stock Price |
Date | End Price |
Date | Pot. Profit |
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| CROX | CQJAI | $42.60 | 11/29/2006 | $47.95 | 1/19/2007 | 11.20% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Continental Airlines – United Airlines Merger? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock | Option | Stock Price |
Date | End Price |
Date | Pot. Profit |
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| CAL | CALAI | $40.64 | 12/1/2006 | $48.20 | 1/19/2007 | 15.40% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The companies identified in chart above are:
1)FARO Technologies Inc. (FARO) – Manufacturers 3d positioning software and equipment used in construction and industry. Chief among the reasons this company’s stock was buoyed this month was the rejection of a key competitors patent claim.
2)Crocs (CROX) – the manufacturer of the unique sponge-like footwear. This stock has been strong for several months now. The stock just hit an all time high and may be poised to keep going up.
3)Continental Airlines (CAL) – An underdog to some, but has been doing well recently. Profits may continue with lower fuel prices. Also, The carrier announced it is expanding service in a recent press release.
Competitors:
Competitors for FARO include: Delcam plc (private), Hexagon AB (private), and Leica Geosystems Holdings AG (private).
Competitors for CROX include: Deckers Outdoor Corp. (DECK), Nike Inc. (NKE), and Timberland Co. (TBL).
Competitors for CAL include: AMR Corporation (AMR), Southwest Airlines Co. (LUV), and UAL Corp. (UAUA).
We still consider these companies to be attractive for a covered call strategy. Using PowerOptions powerful option search engine we can identify the most attractive covered calls stock options trades for these companies for the month of February:
| Potential Covered Calls (26 Days to expiration) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock | Price | Option | EXP / Strike |
Opt. Bid |
% Dnsd. Prot |
%if Unch. |
% if Assgnd |
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| FARO | $25.05 | QEJBE | 07 FEB $25 | $1.00 | 4.00% | 4.00% | 4.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CROX | $47.95 | CQJBJ | 07 FEB $50 | $2.25 | 4.70% | 4.90% | 9.40% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CAL | $48.20 | CALBJ | 07 FEB $50 | $1.90 | 3.90% | 4.10% | 8.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
All of the options mentioned in the above trades expire in 26 days on the 17th of February, 2007.
The Faro covered call trade, an in the money covered call, offers 4.0% downside protection and a potential profit of 4.0% if the stock remains unchanged or rises. The net cost of this trade, per 100 options, is $2,405.00.
The Crox covered call trade, an out of the money covered call, offers 4.0% downside protection and a potential profit of 4.9% if the stock remains unchanged. If the stock rises above the option’s $50 strike price, the potential profit is 9.4%. The net cost of this trade, per 100 options, is $4,570.00.
The Continental Airlines covered call trade, an out of the money covered call, offers 3.9% downside protection and a potential profit of 4.1% if the stock remains unchanged. If the stock rises above the option’s $50 strike price, the potential profit is 8.0%. The net cost of this trade, per 100 options, is $4,630.00.
For more information about how to identify and research great option trades, visit the PowerOptions website. There you will find the data you need to make quick, clear, and informed decisions. You can trade knowing you have found the best investment. Also, PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades. PowerOptions’ premium customer support is second to none in the industry. They can be easily contacted when you need them at their toll-free number to answer customer questions. Call them now toll free at 877-992-7971.
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.
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[tags]Delcam plc, Hexagon AB, Leica Geosystems Holdings AG, AMR, AMR Corp., CAL, Continental Airlines Inc., CROX, Crocs Inc., DECK, Deckers Outdoor Corp., FARO, FARO Techs. Inc., LUV, Southwest Airlines Co., NKE, Nike Inc., TBL, Timberland Co., UAUA, UAL Corp., covered call investment strategy, investment strategy, iron condor, poweroptions, stock option trading, stock options[/tags]