After Wednesday’s trading in Kohl's Corp (KSS) MarketIntelligenceCenter.com's option trade-picking algorithms uncovered a trade that offers a 3.52% or 22.94% (for comparison purposes only), while providing 4.13% downside protection.
The trade is a Feb. '15 covered call at the $60.00 level for a net debit of about $57.96. The net debit is also the breakeven point for this trade.
For a higher return, consider buying a longer-term call option, like the Jan. '16 at the $40.00 level. By buying the call for $22.10 instead of paying about $60.46 for the stock, the assigned return rate for this alternate trade is 2.04%, but the stock has to finish above $59.60 when the sold call expires for this trade to be profitable.
Technical indicators for the stock have been bullish and support and resistance have been in the area of $59.55 and $62.29, respectively.