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NRG Energy (NRG) Trading Near $33.16 Support Level

The patented option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center  are highlighting two trades on NRG Energy (NRG) today after it closed at $33.93 on Jun 6, 2018.

For more conservative investors, look at a covered call using the Jul 20, 2018 $33 call for a net debit of about $32.08. This trade will return 2.83% (24.07% annualized, for comparison purposes only) as long as the stock closes above $33 at expiration. NRG Energy can fall 5.45% before causing a problem.

For investors with a higher appetite for risk, consider a diagonal spread with a Jan 18, 2019 $17 call taking the place of the long stock position and the same short position in the Jul 20, 2018 $33 call. This trade only costs about $15.60 to get into and the rate of return increases to 2.56% (24.07% annualized, for comparison purposes only) but the downside protection falls to 3.94%.