Indices Hold Their Course
Stocks in trading
ranges often provide interesting opportunities for covered
calls. VerticalNet
(
VERT |
Quote |
Chart |
News |
PowerRating), in the B2B group, offers a
nice front-month return. You can buy the stock for 42 1/2,
and you can sell the July 45 calls for 3 1/2, reducing your
cost basis to 39. Your return, if the stock is called away,
is 13.3%. If the stock moves above the strike price early,
you could unwind your position before expiration.
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The biotech group
fell victim to profit-taking on Thursday. It retraced to its
trendline, showing that the current upward trend is still
intact. Watch for a potential reversal of this line. There
may be some resistance at 700.
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The
most active calls today were:
AOLGL,
the America Online July 60 call; last traded at 2 1/4
MSDGQ,
the Microsoft July 85 call; last traded at 2 1/4
YMMGH,
the Yahoo July 140 call; last traded at 9 7/8
QXBGM,
the Ebay July 65 call; last traded at 3 3/4
SXMGT,
the S&P 500 1,500 call; last traded at 18
Best
of luck with your trading on Friday!
P.S. Reminder:
Protective stops on every trade!