I’m looking to buy long calls on low Implied volatility stocks. These trades will have limited risk (under 100$) and unlimited reward potential. I use long call trades in conjunction with my Covered calls and dividend capture strategies to create some diversification in the portfolio (see current watch list) . Even though I buy options, the overall Theta of the portfolio is positive due to the other positions.
These are the stocks I’ll be looking at the next couple of days:
I am specially interested in buying long calls on ORCL and VZ because the break even point is less than the ATR (Average True Range) – that means that it’s actually likely to find this option ITM. Because those stocks distribute dividends, I will look to exercise them before Ex-date to enjoy the Div.
The Chart looks good for all stocks, and I will trade based on recent support levels. I can sleep well knowing my risk is limited anyway.
update: Entered VZ