Make 48.5% annualized return by stock closing above $27!
If the stock closes above $27 at expiration, we would be assigned and our shares automatically sold. We would earn $1.65 per share on $25.25 at risk, or 6.5%. Over a 49-day period, that would be an annualized return of 48.5%.
While the overall stock market has been struggling in recent months, there are a few bright spots. Energy stocks have been the big winners, posting gains of 46.5% so far this year. Utilities stocks have also been doing well, up 6.2% since the start of the year. Investors looking for growth opportunities may want to keep an eye on these two sectors. Energy stocks in particular could be poised for further gains
This company is a great pick for investors looking for exposure to the utilities sector. It has strong geographic diversification, a focus on the wholesale electricity market, and a large percentage of its power generation from renewables. The Inflation Reduction Act, which was passed last month, provides tax breaks and other incentives for the renewable energy business, and this has helped boost the stock price by 17% over the past month.
This trade has the potential to generate a 6.5% return over the next 49 days. This would be an excellent opportunity to take advantage of the market movement and generate some profits.
AES Corp. (AES) is a great buy write candidate. The company has strong fundamentals, and its stock price is trading at a discount to its intrinsic value. The
Buy 100 AES
Sell to Open 1 October 21 $27 Call
Execute for Net Debit of $25.35 or lower
AES is a global power company that is committed to providing clean, affordable energy to people all over the world. The company operates in 14 countries and four continents, and only 29% of its revenue last year came from the United States. AES is committed to helping developing countries grow and prosper, and its work in Chile, the Dominican Republic, and other countries is a testament to that commitment. The company will continue to expand its reach and impact in the years to come, making the world a cleaner, more sustainable place for all.
AES is a leading energy company that is committed to transitioning to renewable sources of energy. The company has a strong portfolio of renewable energy projects, totaling more than 31 gigawatts, with a majority coming from solar and wind power. AES is also constructing an additional 3.5 gigawatts of renewable energy projects, which will further solidify its position as a leader in the renewable energy space.
AES is a leader in independent power production, but it is also a significant player in the retail electric delivery market. The company owns six electric utilities that serve 2.6 million customers. AES is committed to providing affordable, reliable power to its customers and to investing in the communities it serves.
Looking ahead to the rest of the year, we expect revenue to grow 3.2% to $11.5 billion, with earnings up 6.4% to $1.62 per share. This would be a strong performance for the company, and we remain confident in our ability to deliver value for
It is disappointing that there is no dividend until the final week of October. However, investors can take some comfort in knowing that the next earnings report is the first week of November. Hopefully, this will provide some clarity on the company's financial situation and whether or not a dividend is forthcoming.
With the stock trading at $26.10, the trade would involve buying 100 shares and selling one $27 call option expiring on October 21. The cost of the stock would be offset by the premium received from selling the call, resulting in a net debit of $25.35 or lower.
If AES closes above $27 at expiration, we would be assigned and our shares automatically sold. We would earn $1.65 per share on $25.35 at risk, or 6.5%. Over a 49-day period, that would be an annualized return of 48.5%. This would be a great outcome for us, as it would represent a significant return on our investment. We would be very happy with this result.
If AES closes at or below $27.00 on October 21, we would still own the stock at a cost basis of $25.35 per share. This would give us a loss of $1.65 per share, or about 6%.
The trade options income for this particular trade is $75. This is earned by selling 1 AES October 21 $27 call contract.
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