Covered Calls on Visa (V)
Visa (V) is a favorite covered call of mine for many reasons, not the least of which is that V stock has a high underlying price which means a higher absolute premium.
V stock trades at $211.70 as I write. The June 13 $212.50 call is perfectly placed as far as strike and expiration date are concerned, and sells at $3.85. The premium itself, based on the strike, is thus 1.82% for a four-week-plus holding period, or almost 21% annualized.
However, if V stock gets called away, you’ll also collect the 80 cents in capital gains from the purchase price, bringing your total returns to 2.2%, or 25.4% annualized.
Sell just one of these contracts for $385 in income.