Covered Calls: Raytheon Company (RTN)
Raytheon Company (NYSE:RTN) is trading near its all-time high of $157.59, with Wednesday’s close of $152.88. RTN stock is a $45 billion defense contractor, operating after a period of political weakness in which it did just fine, and entering a period with a president who is strong on defense.
Raytheon operates across the broad spectrum of defense: integrated defense systems; intelligence, information and services; missile systems; space and airborne systems; and Forcepoint. It serves the Department of Defense, the Intelligence Services, the armed forces, the Federal Aviation Administration, the Department of Homeland Security, NASA, and has plenty of international customers.
RTN stock isn’t terribly volatile, so premiums are not lucrative. To me, that’s not the point. I’m looking for a modest premium to generate a little cash and hedge a little on the downside
The 18 Aug $155 covered calls sell for $5, which is not only a 3.1% return, but if called away, you get another 1.5% in capital gains.