Daily Stock Market Equity and Options Trading Commentary

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Sunday, March 6, 2011

Getting Defensive: 7 Blue Chip Stocks With 7 Buy-Write Option Ideas

Today I will write about five stocks which I am rotating into that will allow me to get a little more defensive but still participate in this market. As stated in a recent article How to Hedge With Vertical Put Spreads I believe we are long overdue for a slight pull back. But the stocks I will cover today have already corrected and are undervalued in my opinion. In this article I will explain how I am buying into these already beaten up stocks for a bigger discount with options.

I plan on purchasing the shares of blue chip companies and selling covered calls, allowing me to get into these shares cheaper and allowing me to still clip the coupon at least twice. I will be trimming some of the higher beta names out of my portfolio and replacing them with these seven lower beta stocks. This will allow me to participate if the market continues higher, but if the market happens to correct, my portfolio will likely decline less in value.

To continue reading this, view the full article on Seeking Alpha HERE. Sphere: Related Content


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