Investors in First Majestic Silver Corp (AG) saw new options become available this week, for the February 2015 expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the AG options chain for the new February 2015 contracts and identified the following call contract of particular interest.
The call contract at the $5.00 strike price has a current bid of 45 cents. If an investor was to purchase shares of AG stock at the current price level of $4.83/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $5.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 12.84% if the stock gets called away at the February 2015 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if AG shares really soar, which is why looking at the trailing twelve month trading history for First Majestic Silver Corp, as well as studying the business fundamentals becomes important. Below is a chart showing AG's trailing twelve month trading history, with the $5.00 strike highlighted in red:
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