Covered Call – Free Trade Idea
Every Friday we give you a free options trade idea identified by Option Party. Today, we’re focusing on the classic covered call.
There is an attractive covered call trade in DBV TECHNOLOGIES S.A. AMERICAN (DBVT). It is currently trading at $42.08.
There is a 81.7% chance the stock will close above 20.00 on 10-20-2017, and you will earn your target return of $167.85. There is a 82.6% chance the stock will close above 19.14 on 10-20-2017, and you will earn a profit. There is a 4.2% chance the stock will close at or below 0.00 on 10-20-2017, and you will have a total loss of $3,827.20.
To enter this position you will sell 2 call options expiring on 10-20-2017 with a 20.00 strike price and buy 200 shares of stock for 42.08. This will require a net debit of $19.08. The commission for this trade will be $11.20.
All information presented here is current as of 09/29/2017 2:02 pm EST. All trading involves risk. Free trades ideas are presented for illustrative purposes only and are not to be construed as financial advice.
How Did We Do? The Results…
This trade employed a Covered Call strategy that needed DBVT to close above $20.00 on October 20, 2017 to earn the targeted return. DBVT closed at $48.07 which resulted in a return of $167.85.