Best Buy (BBY) Covered Call Play
Shares of Best Buy (BBY) are looking ripe for a covered call play.
Over the past 12 months, Best Buy (BBY) shares have traded between $22.74 and its 52-week high of $45.63. BBY shares are now trading with a P/E Ratio of 8.2 and EPS of 2.96.
So what's the move?
Mastery Sponsors - Become one Today
Shares of Best Buy are trading just $2.50 from their 52 week low, thanks to their recent earnings report where the company reported a 30% drop in profits.
Mastery Bottom Line:
Although Best Buy reported a 30% drop in profits, the retailer just posted its third consequetive quarter of positive same store sales, all during a time of slowed consumer investment in home improvements.
It's hard to imagine Best Buy dropping any lower than it's 52 week low here. We recommend buying the stock and selling covered calls - the December $28 strike is trading at $1.05 right now.
For example, if you were to buy 500 shares at the current price of $25.25, you could then sell 5 contracts and take in $525 for the options premium. If the share price surpasses $28 and you get called, you'll make a total profit of $1,915, a 15% gain in 3 months.
Although selling covered calls is considered a conservative strategy, please make sure you do your research and understand the concepts before diving in.
Best of the Blogs
Scanning and identifying the best blog entries every hour
- The Irony Of Market Manipulation | ZeroHedge
- Existing-Home Sales Highest in Eight Years | Financial Sense
- In These 13 US Cities, Rents Are Skyrocketing | ZeroHedge
- NY Magazine Website Taken Down By Hacker | ZeroHedge
- Potential Runners | iBankCoin.com
- Uber Thrives: Why? | Financial Sense
- Poland, Czech Republic Won't Join "Burning" Euro | ZeroHedge
The most relevant financial news and articles from the Internets
- Obama paid a high price to get Turkey to fight ISIS | Business Insider
- Notable... | StreetInsider.com
- Starbucks banned this man for policing handicapped parking spots,... | Business Insider
- The app that tracks Prince William... | Business Insider
- This FinTech startup says it will take $13 trillion away from Wall Street | Business Insider
- Gorgeous photos of the US Thunderbirds flying over... | Business Insider
- 13 major US companies are pledging $140 billion to fight climate... | Business Insider