In a previous article, “Wal-Mart (WMT) Stuck in a Retail Rut”, we analyzed retail stores for a covered calls stock options strategy since fuel costs were declining and retail shoppers would have more money to spend for Christmas, etc. Every single position selected was profitable and 9 of the10 positions returned the maximum profit for a gigantic average return of +4%. In article, “Retail Investing – Returns Gigantic +4% in Nov.”, we again selected positions for stock options expiration in January of 2007, and every position was fully profitable returning an average of +4%, in only 53 days!
We still consider covered calls for retailers to be an attractive strategy, and we searched for potentially lucrative covered calls stock options positions using PowerOptions’ SmartSearchXL for stock options expiring in March of 2007 and found the following positions.
|SmartSearchXL covered call on January 23|
|JCP||81.97 (-0.24)||JCPCQ||07 MAR 85.0 (53)||2.1||2.6||2.6||6.4|
|SHLD||177.57 (+0.31)||KDUCP||07 MAR 180.0 (53)||7.2||4.1||4.2||5.7|
|TGT||61.43 (-0.07)||TGTCZ||07 MAR 62.5 (53)||1.45||2.4||2.4||4.2|
|WMT||47.81 (-0.15)||WMTCW||07 MAR 47.5 (53)||1.55||3.2||2.7||2.7|
The JCP, SHLD and TGT positions are out-of-the-money [OTM] with maximum potential returns of +6.4%, +5.7% and +4.2% (53 days), respectively. Additionally, the JCP, SHLD and TGT positions have downside protections of 2.6%, 4.1%, and 2.4%, respectively.
The WMT position is in-the-money [ITM] with a potential return of +2.7% (53 days) and downside protection of 3.2%.
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 call investment strategy for their personal portfolios, PowerOptions provides an Internet based search engine for finding potentially lucrative income producing covered call stock options positions.
PowerOptions’ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, iron condor and selling naked puts stock options strategy recommendations. PowerOptionsApplied provides a 30-day risk free trial of its service.
[tags]Christmas, Sears, Roebuck and Co., J. C. Penney Corporation, Inc., Kmart Corporation, Carrefour SA, COST, Costco Companies Inc., TGT, Target Corp., WMT, Wal-Mart Stores Inc., covered call investment strategy, investment strategy, iron condor, option income, poweroptions, selling naked puts, stock option trading, stock options[/tags]