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3 Covered Calls for Long-Term Buy-and-Hold Stocks

Use covered calls for these stocks that delivered earnings disappointments

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Covered Calls: Teva Pharmaceutical (TEVA)

Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) has just been hammered with bad news lately. TEVA remains the largest generics drug producer in the world and has its own pipeline of drugs, but the news has just been terrible on several fronts.

It was also a large holding in many portfolios because it had reliable cash flow and a solid dividend. Now, many investors may be thinking of selling. I don’t know if that’s the right move or not, but they may want to consider the alternative of selling covered calls to bring in some income against some of the recent losses.

TEVA stock closed at $17.50 on Wednesday. The Nov $17.50 covered calls are selling for $2.04. That’s incredible — it’s an 11.7% return for three months holding period — which is unheard of. It will help you claw back some of your losses thus far, assuming you are not planning to sell out of your position.

Lawrence Meyers is the CEO of PDL Capital, a specialty lender focusing on consumer finance and is the Manager of The Liberty Portfolio at He does not own any stock mentioned. He has 22 years’ experience in the stock market, and has written more than 1,600 articles on investing. Lawrence Meyers can be reached at

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