UAL Covered Call

The airlines are lower today on Warren Buffett dumping all his stock in multiple carries. I own 1000 shares of UAL at $28, which is down with the rest of the airlines. I think the airlines might be near their bottoms so I bought another 1000 shares of UAL at $24.75 and sold a $25 Call. I hope I didn’t get sucked in by the high premiums! This Call I sold gave me a $1.40 premium for $1400. The Call expires this Friday

Buy 1000 Shares UAL @ $24.75

Sell to Open 10 UAL 5/8/20 $25.00 C @ $1.40 (+$1400)

This $1.40 Premium is a Rate of Return of 5.6%. UAL is down with the entire industry but it’s a great company. As the economy starts to open I think UAL will hang in there. However, I’m still holding the stock of a hurting industry so I give this trade a Risk Factor 3.

I’m hoping the stock rebounds tomorrow to set this Covered Call up for an assignment, and I get a Call sold on the other 1000 shares I own.

Successful Trading,

Steve

The Options Coach