The patented options-trade picking algorithms used by MarketIntelligenceCenter.com found a trading opportunity with Delta Air Lines Inc. (DAL) that should provide a 9.76% return in just 134 days.
Sell one Jun. '15 call at the $46.00 level for each 100 shares of Delta Air Lines for a net debit per share of $41.91. That net debit also serves as the break-even point for this trade, giving it 10.75% downside protection.
For a riskier play with a higher potential rate of return, consider buying the Jan. '16 call at the $25.00 at about $22.75 instead of taking a long position in the stock. This lowers your net debit to $17.70, but the stock has to close above $42.70 at expiration to keep this trade from losing money.
Standard & Poor’s gives the stock a $62.00 12-month target price and a 5 STARS (out of 5) strong buy ranking. Technical indicators for the stock are bearish and support has been about $45.93 with resistance around the $47.97 level.
DAL closed Wednesday at $46.96 after trading between $46.43 and $47.45. In the past year, the stock has hit a 52-week low of $29.12 and 52-week high of $51.06.