This is my favorite week of the month…
Stocks that had only monthly options now have weekly options, as all monthlies expire at the end of this week.
This enables you to enter short-term trade, pick up some quick cash and enter a position at a discount to the market—and increase that cash on Monday when you sell another call, if you have not had the good fortune to be called out.
The company and stock in question is Alaska Airlines (NYSE:ALK), a darling on Wall Street and among consumers.
The stock is trading around $80 and change, a perfect place to buy shares and sell an at-the-money or in-the-money 80 call.
Why? If the stock holds up, you pick up a 1.5%–2% gain in a week, and if the stock sells off a bit, your cost basis has been lowered by $1.75–$2.00 in a week.
I love the travel sector. This will be the busiest spring break ever for the airlines. I was at Miami International yesterday, and the security lines were unconscionable.
More and more people are spending less money in stores and more to travel. Alaska Airlines has a great route structure, is trying to get into the Cuban market (smart move) and is poised to have a great year.
The least you can do is enjoy a great trade!