What would, the best option trade roll out forward for ups with my investing put option aspire on a six current, price one hundred and five
8/10/2024 05:55am
The best option trade for UPS with a current price of $105 would be a covered call strategy. Here's why:
1. **Covered Call Strategy**: A covered call is a combination of buying a stock and selling a call option on that stock. It allows you to generate income from your stock holdings while also providing some protection against a potential decline in the stock price.
2. **Strike Price Consideration**: Given the current price of $105, you would want to select a call option with a strike price slightly above this price, say $110, to ensure there is some intrinsic value in the option if the stock price were to rise.
3. **Expiration Date**: Choose an option with a suitable expiration date, depending on your outlook for the stock's price movement over the next few months. If you believe the stock will remain above the strike price, a longer-term option might be appropriate. If you have a more cautious view, a shorter-term option could be better.
4. **Premium Received**: By selling the call option, you will receive a premium, which can be used to reinvest in the stock or added to your income.
5. **Upside Protection**: If the stock price rises above the strike price, you will have to sell the stock, but at the strike price, which is better than selling at the current market price.
6. **Drawbacks**: Keep in mind that if the stock price falls below the strike price, you will still lose the premium received, and the stock will be sold at the strike price, which may be below the current market price.
In summary, a covered call strategy using a strike price of $110 and a suitable expiration date would be a good option trade for UPS with a current price of $105. This strategy allows for income generation and some protection against downside risk.