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
- How Capitalism Dies | ZeroHedge
- The Stunning Difference Between Unionized And Non-Unionized Wages | ZeroHedge
- US Busts Alleged Russian Spy Ring In Manhattan | ZeroHedge
- Euro Gold Surges To EUR 1,168 As SYRIZA Threaten TROIKA | ZeroHedge
- Let Me Show You My Charts | iBankCoin.com
- On the Eve of the Shake Shack IPO, I Am Long $HABT | iBankCoin.com
- 2 Foot "Quad-Copter" Crashed On White House Grounds | ZeroHedge
The most relevant financial news and articles from the Internets
- Elon Musk's Appearance On 'The Simpsons' Reminds Us How Insane —... | Business Insider
- The 20 Most Expensive Zip Codes In Silicon Valley | Business Insider
- Snapchat Spent $51 Million On The Company Behind Its Cool New QR Codes | Business Insider
- Everything You Need To Know About Google’s New Deal With The NFL | Business Insider
- Streetinsider.com's Hot Lunchtime... | StreetInsider.com
- The 9 Best Ramen Spots In NYC | Business Insider
- Here's What Celebrities Wore On The SAG Awards Red Carpet | Business Insider