Writing options on stocks you own, or want to own, is an excellent way to generate income and reduce risk. Below are three stock and options ideas.
Lyft, Inc
Symbol: LYFT
Price: $15.63
Strike Price: $18.00
Expiration: 2/24/2023
Premium: $0.64
Option Income (1,000 shares): $640
Potential Stock Return: 15.16%
Potential Option Return: 4.09%
Potential Total Return: 19.26%
Potential Annualized Return: 242.38%
Royal Caribbean Group
Symbol: RCL
Price: $63.72
Strike Price: $71.00
Expiration: 2/17/2023
Premium: $0..92
Option Income (1,000 shares): $920
Potential Stock Return: 11.42%
Potential Option Return: 1.44%
Potential Total Return: 12.87%
Potential Annualized Return: 213.51%
Spotify
Symbol: SPOT
Price: $101.19
Strike Price: $118
Expiration: 02/03/2023
Premium: $1.00
Option Income (1,000 shares): $1,000
Potential Stock Return: 16.61%
Potential Option Return: 0.99%
Potential Total Return: 17.60%
Potential Annualized Return: 803.03%
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 January 8, 2023, and is subject to change without notice. Data sources: Value Line, YCharts, TD Ameritrade and Yahoo! Finance
Bill Parrott is the President and CEO of Parrott Wealth Management – www.parrottwealth.com
