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Friday, February 4, 2011

Lowes buy-write

Buy 100 LOW @ 24.70 =    ($2,470)

Sell 1 Jan 13 $25 call =           $330
Sell 1 Jan 13 $25 put =           $405
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Net outlay:                       $1,735

Return: $88 div + $30 appreciation + $735 in options premiums = $853 or 49% return on a stock that needs to go up by 30 cents in the next 23 mos.

Break-even: $21.17 or 14% cushion from today's price.

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