Core Insights - The article discusses various income-generating options strategies, particularly focusing on covered calls, cash-secured puts, and bull put spreads as effective methods for investors to enhance returns [2][19]. Group 1: Covered Calls - A covered call strategy involves owning shares while selling call options, allowing investors to earn premium income and potentially improve annual returns [2]. - Since 2022, nearly 80 covered-call ETFs have been launched, attracting over $65 billion in investments, indicating strong interest in this strategy [2]. - The example of RTX shows that the share price was 1.31% out of the money (OTM) at the close, with a potential annualized return of 27.2% if the share price reaches the strike price of $175 at expiration [9][10]. Group 2: Cash-Secured Puts - Cash-secured puts involve selling put options while setting aside cash to buy shares if assigned, generally reflecting a bullish outlook [12]. - The example of Spotify's $520 put shows a volume of 964, with a profit probability of around 87% and an annualized return of 10.1% [15][17]. - The strategy allows investors to potentially acquire shares at a lower price while generating income from the premiums [12][18]. Group 3: Bull Put Spreads - A bull put spread consists of selling a short put option and buying a long put at a lower strike price, providing limited losses and profits [19]. - Pfizer's $23 put option had a high volume-to-open-interest ratio, suggesting significant interest, with potential combinations yielding net credits ranging from $14 to $160 [21][22]. - Selecting a short $26 put can lower potential loss by 17% while increasing the chance of success by 12%, demonstrating a strategic approach to risk management [24][25].

Core Viewpoint - Celestica (CLS) stock has shown a strong upward trend since April, making it a potential candidate for bullish option traders [1] Group 1: Trading Strategy - A bull put spread is recommended for traders looking to capitalize on Celestica's stock performance, which is a defined risk strategy [1][2] - The setup involves selling a higher strike put option while buying a lower strike put option within the same expiration cycle, allowing traders to receive an option premium [2] Group 2: Trade Setup Details - Traders anticipating that Celestica will remain above $210 can sell a Nov. 21 210-200 bull put spread for approximately $2.40, generating around $240 in premium with a maximum risk of $760 on a 100-share contract [3] - If the spread expires worthless, it would yield a 31% return in seven weeks, provided the stock stays above $210 at expiration [4] - The breakeven point for this trade is calculated at $207.60, which is 17.26% below the recent closing price [4] Group 3: Risk Management - It is advisable to set a stop loss if the stock falls below $220 or if the spread value increases from $2.40 to $4.80, to mitigate potential losses [5] Group 4: Company Overview - Celestica is recognized as one of the largest electronics manufacturing services companies, collaborating with major players in the computer and communications sectors [6] - The company provides comprehensive services, from printed circuit and system assembly to postproduction support, catering to both low-volume custom builds and high-volume commodity products [6][7] - Celestica has received high ratings from Investor's Business Daily, including a Composite Rating of 99, an Earnings Per Share Rating of 99, and a Relative Strength Rating of 98 [7]

Today, we are using the stock screener to find stocks with a Buy rating and then looking at a couple of bullish option trade ideas. First the stock scanner: More News from Barchart A screenshot of a computer AI-generated content may be incorrect. Which produces these results: A screenshot of a computer AI-generated content may be incorrect. The two companies we’re going to look at that meet our criteria are Amazon (AMZN) and Palantir (PLTR). Amazon Bull Put Spread A bull put spread is a defined risk ...