Covered Call Trade

I had some cash in the account, so I went looking for another good trade opportunity. I went through the same drill as I outlined yesterday, and found a trade I like with MED.

I purchased 100 shares at $9.75 and sold the Mar 10 call for $.95. This gives a return to expiration of 8.1% for 54 days if unchanged and about 12% if called.

A trading note: When I placed the trade MED was at $9.85 bid and the option was $1.00 bid and $1.20 asked. I put in my trade at a limit of $8.80 net debit to try to push up the bid. Well, I got filled as listed above for the net $8.80 cost. This dropped my expected return if unchanged from 9.0% to 8.1%. If called the return remains the same, because the same amount was invested.


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