Covered Calls for Expedia (EXPE)
I really like playing the covered calls game with Expedia (EXPE). EXPE can be very volatile, and that means big premiums. You have a tiny window with Expedia reporting earnings this evening. EXPE currently sells around $64, and though there’s an expiration date the very next day, you still can sell that Feb 7 $64 call for a whopping $3.80. That’s a 6% return in one day.
If EXPE gets hit, you still own it at an effective buy price of $60.20 — a good price in my eyes. If you miss the earnings report, or want to wait, then see where the stock settles. At that price, I’d sell the March expiration call. You should get about 3%-3.5% on the trade, which is a great annualized yield. I would not sell for less than 3%.