Investors in Gran Tierra Energy Inc (GTE) saw new options begin trading this week, for the September 21st expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the GTE options chain for the new September 21st contracts and identified the following call contract of particular interest.
The call contract at the $7.50 strike price has a current bid of 5 cents. If an investor was to purchase shares of GTE stock at the current price level of $6.31/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $7.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 19.65% if the stock gets called away at the September 21st expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if GTE shares really soar, which is why looking at the trailing twelve month trading history for Gran Tierra Energy Inc, as well as studying the business fundamentals becomes important. Below is a chart showing GTE's trailing twelve month trading history, with the $7.50 strike highlighted in red:
START SLIDESHOW:
Top YieldBoost Calls of the S&P 500 »