It can be easy to get wrapped up in the day-to-day, minute-to-minute drama unfolding in Europe. But it is important to keep an eye on the situation at home, which, thankfully, is a lot more uplifting.

Corporate profits are at an all-time nominal high, and consumer confidence is surging. This optimism is manifesting itself in demand for durable goods, which were too expensive to buy during the recession.

A great stock poised to profit from this is Navistar International Corp. (NYSE:NAV). This company manufactures and markets medium and heavy trucks, school buses, mid-range diesel engines and service parts. And yesterday, a Goldman Sachs analyst upgraded the stock to “Neutral” from “Sell.”

To gain exposure to Navistar we recommend a buy-write trade. This involves buying the stock for $37 and selling the NAV Jan 40 Call against it. The Jan 40 Calls are trading at a 47.5% implied volatility, which means that there are juicy premiums to be had by selling them.

Should Navistar close above $40 at January expiration, the trade will return 12.40%. If Navistar does not, the premium received from selling the call is yours to keep and effectively lowers your basis in the stock by $1.40.

The bottom line is that this trade increases the odds of achieving above-market returns while simultaneously reducing downside risk. That is a win-win situation, in our book.

Here are the details of this trade idea:

Stock/Index:  NAV

Stock Price:  $37

Option Play:  Covered Call

Buy Stock:  100 Shares @ $37

Sell Call:  NAV Jan 40 Call @ $1.40

Net Cost:  $35.60 = $37 – $1.40 (Net Cost = Stock – Premium Received)

Breakeven:  $35.60 = $37 – $1.40 (Breakeven = Stock Price– Premium Received)

Max Profit:  $4.40 = $40 + $1.40 – 37.00 (Max Profit = Strike Sold + Call Premium – Stock)

Max Loss:  $35.60 = $37 – $1.40 (Max Loss = Stock – Call Premium)

Call Away % Return:  12.40% = $4.40/$35.60 (Call Away Return Max Profit / Net Cost)