Selling the June $12.00 call while at the same time buying NBR stock for $11.51 will produce a new covered call with a target return of 20.7 %. Based on recent data, this trade will cost about $9.94, which is also the covered call’s breakeven point. At that price, this covered call has 13.6 % downside protection, while seeking an assigned return of 20.7 % return in 137 days. If NBR is higher than $12.00 on 6/19/2015, we are assured that simple return.
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