Bed Bath & Beyond (BBBY)
Retail is a dicey place to be in this economy, so if I sell naked puts against retail, it had better be a solid stock.
Bed Bath & Beyond (BBBY) is in really good shape. For one, BBBY stock has $900 million in cash and no debt. It is growing at a nice 12% clip, and free cash flow is routinely in the $800 million range annually.
Like DirecTV, BBBY stock has not been an explosive performer, but has the kind of volatility that makes it a good trading and options vehicle. The Jan 80 Puts recently went for $2.75 (though have since fallen to around $2.65). I sold two of the put contracts for $550 in income, bringing the total thus far to $830.
Note: BBBY does report earnings Wednesday, so the potential for volatility in the stock is extremely high.