Covered Calls: Microsoft Corporation (MSFT)
Microsoft Corporation (NASDAQ:MSFT) may not be the guy in the missile silo that launches the nukes, but I like MSFT in general as a play on covered calls and because it is used a lot throughout the defense sector as far as an operating system.
MSFT certainly isn’t the company it once was, and that’s another reason to consider trading covered calls. It’s a great company, diversified, with fantastic cash flow and financials. You could buy the stock, sell covered calls repeatedly and whether called away or not, you can turn around and roll the option play month after month. It also pays a nice dividend to supplement any money you make holding the stock while still having sold covered calls.
MSFT stock closed Wednesday at $65. You can sell the 16 June $65 covered calls for $1.95. That is exactly 3%, and for a shorter period than the other stocks.
Lawrence Meyers is the CEO of PDL Capital, a specialty lender focusing on consumer finance. As of this writing, he did not hold a position in any of the aforementioned securities. He has 22 years’ experience in the stock market, and has written more than 1,600 articles on investing. He also is the Manager of the forthcoming Liberty Portfolio. Lawrence Meyers can be reached at TheLibertyPortfolio@gmail.com.