Investors in Uranium Energy Corp (UEC) saw new options begin trading this week, for the August 2014 expiration. One of the key data points that goes into the price an option buyer is willing to pay, is the time value, so with 235 days until expiration the newly trading contracts represent a possible opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the UEC options chain for the new August 2014 contracts and identified the following call contract of particular interest.The call contract at the $2.50 strike price has a current bid of 5 cents. If an investor was to purchase shares of UEC stock at the current price level of $1.86/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $2.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 37.10% if the stock gets called away at the August 2014 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if UEC shares really soar, which is why looking at the trailing twelve month trading history for Uranium Energy Corp, as well as studying the business fundamentals becomes important. Below is a chart showing UEC's trailing twelve month trading history, with the $2.50 strike highlighted in red:
First Week of August 2014 Options Trading For Uranium Energy (UEC)
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