30 Option Write Ideas for November's Option Expiration
With the November options expiration approaching us Friday, I thought I would outline some trade ideas on stocks I wouldn't mind going long on, that would return good percentages by Friday (as of market close Friday November 13, 2009). When using the buy/write option strategy, it is important that you are willing to hold the security in case it is below the strike price at options expiration. I have put together a list of 30 stocks which will return a nice percentage gain if they are above the strike price as of November options expiration, but will also protect (lower cost basis) to the downside in case the stock sells off slightly and expires below the strike price. The list below is a very tall one, and for your convenience I have ranked the securities in order from the largest potential % return to the least. To get a better understanding of stock options and different option strategies please check out my Simplified Stock Option Trading E-Books.
Note that higher beta securities return higher percentages due to their levels of implied volatility, and because they are riskier.
To understand the table, I will give a detailed example on Suntech Power (STP) below. Also note STP Reports earnings Thursday which will give even more implied volatility and a higher premium to the call options.
Sell the Suntech Power November 14 strike call option. The premium received from the call option would give a downside protection of 4.01%. If the stock is assigned at options expiration on November 21, 2009 the total return from this position would be 6.05% in 5 trading days.
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