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
- Russia Sends 10,000 AK-47s To Afghanistan As Government Mulls "Inviting" Moscow To Help Fight "Terrorists" | ZeroHedge
- Obama Says "Enough Is Enough," Urges Gun Restrictions After Deadly Planned Parenthood Standoff | ZeroHedge
- US Corporate Earnings, Overseas Sales and the Dollar | Financial Sense
- Has Deflation Been Defeated? | Financial Sense
- The Best Insurance Policy Ever Written.........Bar None (pardon the pun) | ZeroHedge
- Fourth Turning - Politicians Driving The World Towards War | ZeroHedge
- EU Reaches Deal With Turkey, Will Pay €3 Billion To Stem Refugee Outflow But Not Everyone Wants To Pay Up | ZeroHedge
The most relevant financial news and articles from the Internets
- Thousands march on climate change in Manila, Brisbane | Business Insider
- At least 18 civilians killed in Syria air strikes:... | Business Insider
- Hundreds of Russian truck drivers head to Moscow for... | Business Insider
- Adele's '25' sells record-breaking 3.38 million... | Business Insider
- No. 2 Alabama claims SEC West with 29-13 win over Auburn | Business Insider
- Black Friday store sales fall as Americans buy more... | Business Insider
- This Swedish house was designed by 2 million people — and it is surprisingly... | Business Insider