Option Trade Alert! American Express Co.October 12 | Posted by Kevin Monaghan | Options University
We’ve recommended a trade for American Express Co. (AXP) for Elite Inside Trader’s over the weekend. The purpose of the trade is to generate income without taking on as much risk as buying the stock outright. We’re sharing the trade with you delayed, but Elite Inside Trader members get live trade alerts sent to them as they break. The profit moved down a bit, but the trade still works.
Why do these trades work? Markets moved higher in September and prices are higher than they were a few weeks ago. I’m cheap when it comes to buying stock, so I’d rather place a trade that allows me to buy if the stock falls. If it doesn’t fall, then I still make a profit. The stock closed at $37.94, and the break even on this trade is $35.06. So the stock could move down 7.6% and I’d still not see a loss.
BUY-WRITE: AMERICAN EXPRESS (AXP)
Secondary Purpose: Accumulate at a lower price (below $36) with continued option recommendations.
BUY: 100 Shares AXP
SELL: 1 NOV $36 CALL 2010
(Advanced options traders can just sell the $36 put)
Does this make sense to you? If it doesn’t, don’t worry. We’ll soon be launching videos to not only show you how to place these trades, but how to profit from them.
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