Covered Call (25 Jul 11)

TO ALL:

Here are the “potential trades” for next week:

Covered Call (Stocks)

In its simplest form, the Covered Call trade requires that you own (100) shares of stock and then sell (1) Call contract.  In this trade, the short Call is described as covered because it is secured by your long stock.  If the option is exercised, you possess the stock required for sale at the strike price.

First Majestic Silver Corp (AG) $24.94

Buy (100) shares @ $24.94

Sell to Open (1) Aug 11 25 C @ $1.60

Net Debit: $23.34 ($2,334.00)

Return If Assigned: 7.1% (27 days)

Zagg Incorporated (ZAGG) $16.20

Buy (100) shares @ $16.20

Sell to Open (1) Aug 11 17 C @ $0.80

Net Debit: $15.40 ($1,540.00)

Return If Assigned: 10.9% (27 days)

CVI Energy Inc (CVI) $27.35

Buy (100) shares @ $27.35

Sell to Open (1) Aug 11 30 C @ $0.50

Net Debit: $26.85 ($2,685.00)

Return If Assigned: 12.4% (27 days)

All positions displayed are for educational purposes only and are not intended to be recommendations.