In the blog article, “Wal-Mart – Generic Drugs – Options Investing”, we analyzed the generic drug industry in light of Wal-Mart’s (WMT) introduction of $4 generic drugs.
In article, “Generic Drug Investing Returns +1.3% in Nov.”, we showed the profitability of the strategy, and in article, “Generic Drug Investing – Returns Cool +4.6% in Jan 07”, we selected covered calls positions for February of 2007. We only found one position for PRX for February of 2007, but it generated a very nice return of +3.8% in only 24 days!
With Wal-Mart’s $4 generic drug offering, we are still bullish on the generic drug players. Using PowerOptions SmartSearchXL stock options search tool we found the following generic drug covered calls stock option position for stock options expiration in April of 2007:
| SmartSearchXL covered call search for Feb 23 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Sym |
Stock Price |
Option Sym |
Expire &Strike |
Opt Bid |
%Dnsd. Prot |
%If Unch. |
%If Asgnd. |
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| PRX | 25.10 (+0.26) | PRXDE | 07 APR 25.0 (57) | 1.85 | 7.4 | 7.5 | 7.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
We didn’t find any suitable positions for March, but we did find one suitable generic drug covered calls stock options position for April (PRX) with a maximum potential return of 7.5% if the stock price is greater than the $25 strike price of call option PRXBE and in only 57 days.
Competitors:
Competitors for PRX include: Mylan Laboratories Inc. (MYL), Teva Pharmaceutical Industries Ltd. (TEVA), and Watson Pharmaceuticals Inc. (WPI).
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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.
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[tags]blog, generic drug, MYL, Mylan Labs., PRX, Pharmaceutical Resources Inc., TEVA, Teva Pharma. Indus. Ltd., WMT, Wal-Mart Stores Inc., WPI, Watson Pharma. Inc., covered call investment strategy, investment strategy, iron condor, option income, poweroptions, selling naked puts, stock option trading, stock options[/tags]