Covered Calls: Alphabet (GOOG, GOOGL)
Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) disappointed investors with its last earnings report. Frankly, there wasn’t too much to be upset about, but when a stock gets extended, it doesn’t take much for the market to turn on it. GOOGL stock fell about 6% and closed Wednesday at $940.08 per share.
You have a few covered calls that you can sell here if you plan on holding GOOGL stock for the long term.
The 20 Oct $940 covered calls are offering a whopping premium of $28. So if you have 100 shares of GOOGL stock amounting to $94,000 worth, you can sell one contract and make $2,800. GOOGL could, of course, soar back above $971 per share, forcing you to either buy back the call or miss some upside.
Or you could sell the Sept $940 covered calls and still make $17.50 on the contract. That’s an excellent return of 1.9% for about five weeks.