Tuesday, October 12, 2010 EST

Running an Advanced Option screener today looking for good covered call opportunities on value stocks for the 11/20 expiration date.


The first stock that came up on the list, which was a naked put trade this week is (AMED). AMED is a value play with a P/E of 5.50. There were four potential trades that came up for (AMED).  The $26 in the money (ITM) strike on AMED has a 5.15% ROI for 39 days. 


The covered call that looked most compelling is the out of the money (OTM) $28 strike with 5.38% ROI and 7.38% downside protection.  The risk/reward on the $28 strike makes this trade more attractive than the ITM strikes.  Now the research to make sure from a fundamental standpoint this is a good pick.