I just did a 10 contract At-the-Money “Buy-Write” with Weight Watchers (WTW). I bought 1000 shares of the stock at $38.50 and sold 10 contracts of the 7/28/17 $38.50 Calls and got a premium of 80¢ for $800. This is a great premium on a $38 stock for a 4 day deal. The stock has been moving very well so I think this is a low risk trade. I give it a Risk Factor 1. The Rate of Return is a little over 2% for 4 days.
Weight Watchers Buy-Write
Buy 1000 Shares Weight Watchers @ $38.50
Sell to Open 10 WTW 7/28/17 $38.50 C @ 80¢ (+$800)
Clearly I’m in this trade for the premium only. If the stock continues doing what it’s been doing this will be a quick $800.
Steve
The Options Coach