Maximizing Returns
Option Overwriting Screen report, these option overwriting candidates within the Russell 1000 (NYSEARCA:IWF) can have at least a 7% gain by March 15, earn a minimum premium of 4%, and have at least $5 million in underlying notional option volume.
“Overwriting outperforms a long-only position if the underlying stock declines, but if the stock rises, it can underperform if the call strike is not sufficiently high,” the analysts wrote in the research.
Covered call writing is best suited for names that the call seller has a neutral short-term outlook on. A call sells the right to additional upside participation beyond the call strike for a price, according to the study.
It is vital to note that covered call writing “is not a hedge and maintains full downside risk.” Furthermore, high volatility stocks typically have higher call option prices to compensate for the greater risk.
These are the overwriting candidates whose options expire on March 15:
Penn Entertainment(PENN) – Strike price: 25; premium call bid: 1.27; call and dividend premium: 5.4%; call-away return: 12.3%.
AppLovin (App) – Strike price: 47.5; premium call bid: 4.40; call and dividend premium: 9.3%; call-away return: 10.2%.
Albemarle (ALB) – Strike price: 125; premium call bid: 6.80; call and dividend premium: 6%; call-away return: 10.1%.
Crocs (CROX) – Strike price: 115; premium call bid: 5.20; call and dividend premium: 4.7%; call-away return: 9.2%.
Marvell Technologies (MRVL) – Strike price: 72.5; premium call bid: 4.30; call and dividend premium: 6.1%; call-away return: 9.1%.
Comerica (CMA – Strike price: 55; premium call bid: 1.50; call and dividend premium: 4.3%; call-away return: 8.8%.
Norwegian Cruise Lines (NCLH) – Strike price: 17; premium call bid: 1.00; call and dividend premium: 6%; call-away return: 8.2%.
Hasbro (HAS) – Strike price: 52.5; premium call bid: 2.75; call and dividend premium: 5.4%; call-away return: 7.8%.
Nvidia (NVDA) – Strike price: 725, Premium call bid: 50.95, Call & Dividend Premium: 7.1%, Call-Away Return: 7.4%
Palo Alto Networks (PANW) – Strike price: 380, Premium call bid: 19.40, Call & Dividend Premium: 5.2%, Call-Away Return: 7.4%
Must read book about investing – check here
Maximizing Returns Maximizing Returns Maximizing Returns Maximizing Returns Maximizing Returns Maximizing Returns Maximizing Returns