In article, “Visa – Plastic Money – IPO”, we analyzed the credit card industry and illustrated how profitable a covered call strategy for credit card companies can be. We continued down the covered calls credit card investing path and for April of 2007 a return of 3% was experienced. Since we began the covered calls credit card strategy six months ago, a very nice total return of 19% has been observed.
The credit card covered calls investment strategy has worked so well we will go for it again for next month’s stock options expiration. Using PowerOptions stock options search tool, we found the following position for stock options expiration in May of 2007:
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| PowerOptions covered call search | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Sym |
Stock Price |
Option Sym |
Expire &Strike |
Opt Bid |
%Dnsd. Prot |
%If Unch. |
%If Asgnd. |
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| MA | 108.90 (-0.44) | MAEB | 07 MAY 110.0 (23) | 3.5 | 3.2 | 3.3 | 4.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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For May the search only returned one position, an out-of-the-money covered calls stock options position with a maximum potential return of 4.4% (23 days). The 4.4% return requires the price of MA’s stock to increase to or above the $110 strike price of the call option.
The MA covered calls position has a downside protection of 3.2% and a % if unchanged potential return of 3.3%.
Competitors:
Competitors for MA include: American Express Company (AXP), Discover Financial Services LLC (private), Visa International (private), Checkfree Corp. (CKFR), and Net 1 U.E.P.S. Techs. Inc. (UEPS).
For more information about how to identify and research great option trades, visit the PowerOptions website. PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades and you will find the data you need to make quick, clear, and informed decisions. With PowerOptions tools, you can trade knowing you have found the best investment for your risk/reward profile. PowerOptions provides a toll-free number (1-877-992-7971) for customer support (PowerOptions‘s customer support is second to none in the industry) for answering customer questions.
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] Visa, Discover Financial Services LLC, Visa International, AXP, American Express Co., CKFR, Checkfree Corp., UEPS, Net 1 U.E.P.S. Techs. Inc., covered call investment strategy, investment strategy, iron condor, poweroptions, stock option trading, stock options [/tags]