Walter Energy (NYSE: WLT) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today.
Buying the stock for $14.69 while simultaneously selling the January $14.00 call will result in a new position with a target return of 8.7%.
Based on recent prices, this position will cost about $12.88, which is also the trade’s breakeven point. At that level, this covered call has 12.3% downside protection, while still providing a 8.7% return in 53 days as long as WLT is above $14.00 on 1/18/2014.
For comparison purposes only, this Walter Energy covered call aims for an annualized return rate of 59.8%.
*Annualized returns are shown for comparison purposes
*For more details on these covered calls and how you can use them to enhance your portfolio performance, go to: