Sunday, January 18, 2009

Target covered calls

I like the idea of selling covered calls on Target (TGT). It's currently trading at $35. The Jan' 10 calls are trading around $10. If you buy the stock and sell the calls, you are paying $25 for the stock. As long as the stock is above $25 on Jan' 10, you make money. And if it is $35 or above, you make 40% or $10. It seems like a good deal since Target is such a great company. I'm waiting for the stock drop a little, so i can get a better deal.

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