Investing in Utilities – Covered Calls

Utilities are another sector considered to be less prone to an economic virus. When the economy is feeling ill, people still use electricity, water, gas, etc.

Some utilities with a heavy emphasis on supplying industrial customers could be negatively impacted during tough economic times, but utilities supplying its wares to the general population are generally inoculated from catching an economic malady.

The prices of utility stocks have been on a rampage over the last year. And with the recent acquisition of TXU on the table, the stocks of utilities could continue their upward ascent.

Using PowerOptions powerful stock options search tools, the following covered calls stock options positions for utility companies were found.

The MIR covered calls position has the highest potential return at 6.3% (36 days). The price of MIR’s stock must increase to or above the call options $47.5 strike price at options expiration in order to receive the 6.3% return.

The RRI covered calls position has the highest potential return if the prices of the stocks remain unchanged at stock options expiration. If the price of the RRI stock is the same at stock options expiration as when entered, the position will return 4.2%.

The RRI covered calls position also has the highest downside protection at 4.4%. As long as the price of the RRI stock does not decrease more than 4.4% at options expiration, the position will be profitable.

Competitors:
Competitors for RRI include: American Electric Power Co. Inc. (AEP), Duke Energy Corp. (DUK), TXU Corp. (TXU), and Mirant Corp. (MIR).
Competitors for NRG include: AES Corp. (AES), Mirant Corp. (MIR), and Calpine Corporation (private).
Competitors for AES include: Duke Energy Corp. (DUK), Endesa SA (ELE), Mirant Corp. (MIR), Edison International (EIX), Enersis SA ADR (ENI), and NRG Energy Inc. (NRG).
Competitors for CVA include: Environmental Power Corp. (EPG), Paula Financial (PFCO.PK), and US Energy Systems Inc. (USEY).
Competitors for PEG include: Consolidated Edison Inc. (ED), Firstenergy Corp. (FE), and Delmarva Power & Light Company (private).
Competitors for STR include: Anadarko Petroleum Corp. (APC), Cabot Oil & Gas Corp. (COG), Chesapeake Energy Corp. (CHK), and Black Hills Corp. (BKH).
Competitors for MIR include: AES Corp. (AES), Reliant Energy Inc. (RRI), Calpine Corporation (private), and NRG Energy Inc. (NRG).
Competitors for EXC include: Ameren Corporation (AEE), Dynegy Inc. (DYN), PPL Corp. (PPL), and UGI Corp. (UGI).
Competitors for CEG include: Allegheny Energy Inc. (AYE), American Electric Power Co. Inc. (AEP), Duke Energy Corp. (DUK), and Potomac Electric Power Co. (POM).
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.

PowerOptions‘ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, naked puts and iron condor stock options strategy recommendations. PowerOptionsApplied provides a 30-day risk free trial of its service.

[tags] Calpine Corporation, Delmarva Power & Light Company, AEE, Ameren Corp., AEP, American Electric Power Co. Inc., AES, AES Corp., APC, Anadarko Petroleum Corp., AYE, Allegheny Energy Inc., BKH, Black Hills Corp., CHK, Chesapeake Energy Corp., COG, Cabot Oil & Gas Corp., DUK, Duke Power Co., DYN, Dynegy Inc., ED, Consolidated Edison Inc., EIX, Edison International, ELE, Endesa SA, ENI, Enersis SA ADR, FE, Firstenergy Corp., MIR, Mirant Corp., NRG, NRG Energy Inc., POM, Potomac Electric Power Co., PPL, PPL Corp., RRI, Reliant Resources Inc., TXU, Texas Utilities Co., UGI, UGI Corp., covered call investment strategy, investment strategy, iron condor, poweroptions, stock option trading, stock options [/tags]