Writing options on stocks you own, or want to own, is an excellent way to generate income and reduce risk. Below are five stock and options ideas.
Boeing
Symbol: BA
Price: $174.92
Strike Price: $185
Expiration: 12/16/2022
Premium: $2.59
Income (1,000 shares): $2,590
Stock Return: 5.76%
Option Return: 1.48%
Total Return: 7.24%
Annualized Return: 120.17%
Dick’s Sporting Goods
Symbol: DKS
Price: $119.10
Strike Price: $125
Expiration: 3/17/2023
Premium: $10.4
Income (1,000 shares): $10,400
Stock Return: 4.95%
Option Return: 8.73%
Total Return: 13.69%
Annualized Return: 44.21%
Nike
Symbol: NKE
Price: $105.97
Strike Price: $115
Expiration: 1/20/2023
Premium: $3.35
Income (1,000 shares): $3,350
Stock Return: 8.52%
Option Return: 3.16%
Total Return: 11.68%
Annualized Return: 74.81%
PayPal
Symbol: PYPL
Price: $81
Strike Price: $85
Expiration: 2/17/2023
Premium: $6.05
Income (1,000 shares): $6,050
Stock Return: 4.94%
Option Return: 7.47%
Total Return: 12.41%
Annualized Return: 53.28%
Williams-Sonoma
Symbol: WSM
Price: $123.72
Strike Price: $130
Expiration: 01/20/2023
Premium: $6.10
Income (1,000 shares): $6,100
Stock Return: 5.08%
Option Return: 4.93%
Total Return: 10.01%
Annualized Return: 64.08%
Options trading involves risk and is not suitable for every investor. Your returns could differ significantly from those posted in this blog, and you could lose money. Do not use margin or leverage to trade options. Please refer to the Characteristics and Risks of Standardized Options to learn more about options trading and writing – https://www.theocc.com/. We have no affiliation with the OCC or the Options Industry Council.
Price and return data is from November 24, 2022, and is subject to change without notice. Data sources: Value Line, YCharts, and TD Ameritrade.
Bill Parrott is the President and CEO of Parrott Wealth Management – www.parrottwealth.com