The patented option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center are highlighting two trades on Avis Budget (CAR) today after it closed at $43.81 on May 16, 2018.
For more conservative investors, look at a covered call using the Jun 15, 2018 $43 call for a net debit of about $41.57. This trade will return 3.43% (43.29% annualized, for comparison purposes only) as long as the stock closes above $43 at expiration. Avis Budget can fall 5.13% before causing a problem.
For investors with a higher appetite for risk, consider a diagonal spread with a Jan 18, 2019 $18 call taking the place of the long stock position and the same short position in the Jun 15, 2018 $43 call. This trade only costs about $24.45 to get into and the rate of return increases to 2.24% (43.29% annualized, for comparison purposes only) but the downside protection falls to 3.12%.