My trade is to buy the stock at $22 and sell the Nov 20 calls for $2.40. My risk is the stock falling to zero, $19.60 per share, and my reward is the value of the calls, $2.40. My break-even is $19.60. I am hoping to make a return of 10.1% on the call sale.
Tag: Covered Call Strategy
PKG Covered Call Trade 9.24.2012
The stock opened this morning at $34.92, up $1.07 from Friday’s close. PKG’s 52-week trading range is $21.75 – $35.40, hitting a new 52-week high this morning. The stock has a market cap of 3.44 billion and earnings per share of $1.46.
PKG options are trading at 3.4 times the usual volume, with the top trade selling 1571 Oct 35.0 Puts for $1.20, a bullish trade. My trade is to buy the stock at $34.95 and sell the Oct 35 Calls for $1.25. My break even on this trade is a decline in stock price to $33.70. My goal is to yield 3.6% on the sale of the call, if the stock stays above 35.
