NaughtyPines

HUN COVERED CALL IDEA

NYSE:HUN   HUNTSMAN CORP
a year ago
HUN (basic materials) currently has an implied volatility rank of 64 and an implied volatility of 60, and the premium to the call side for slightly out of the money calls is sufficiently rich to lower the cost basis in a long stock position to a favorable break even metric (Feb 19 12 short calls currently .77 at the mid price).

Here's the basic setup:

100 HUN long shares at 11.41
1 Feb 19th short 12 call
Entire Package: 9.72 ($972) (making your break even at 9.72/share, excluding fees/commissions)
Max Profit: $228 if called away at $12

Notes: Naturally, I'm looking at off hours prices here with wide spreads on the underlying and on the short call, so you'll no doubt want to reexamine the setup come Monday NY open.
a year ago
Comment: Filed for 10.50.
11 months ago
Comment: Covered the short call for a .05 debit and sold another short call above my cost basis somewhat out in time -- the Aug 19th 12 short for a .35 credit, further reducing cost basis.
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