Netflix (NASDAQ: NFLX) has been identified by InvestorsObserver analysts as being well-positioned for a new covered call today. Buying the stock for $79.24 while selling the December $77.50 call will produce a new covered call with a break-even point around $71.69. At that price, this position has a target return of 8.1 %. This trade will have roughly 9.5 % downside protection, while still aiming for a 8.1 % return in 51 days. It will lock in that return as long as Netflix is above $77.50 on 12/22/2012. For comparison purposes only, this NFLX covered call aims for an annualized return rate of 58.0 %.

JC Penney (NYSE: JCP) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $24.01 while simultaneously selling the December $24.00 call will result in a new position with a target return of 9.9 %. Based on recent prices, this position will cost about $21.83, which is also the trade’s breakeven point. At that level, this covered call has 9.1 % downside protection, while still providing a 9.9 % return in 51 days as long as JCP is above $24.00 on 12/22/2012. For comparison purposes only, this JC Penney covered call aims for an annualized return rate of 71.1 %.

Electronic Arts (NASDAQ: EA) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $12.35 while simultaneously selling the March $12.00 call will result in a new position with a target return of 9.8 %. Based on recent prices, this position will cost about $10.93, which is also the trade’s breakeven point. At that level, this covered call has 11.5 % downside protection, while still providing a 9.8 % return in 135 days as long as EA is above $12.00 on 3/16/2013. For comparison purposes only, this Electronic Arts covered call aims for an annualized return rate of 26.4 %.

Cavium (NASDAQ: CAVM) has been chosen by InvestorsObserver analysts as a candidate for a new covered call today. Selling the December $33.00 call while at the same time buying CAVM stock for $33.18 will produce a new covered call with a target return of 6.3 %. Based on recent data, this trade will cost about $31.03, which is also the covered call’s breakeven point. At that price, this covered call has 6.5 % downside protection, while seeking an assigned return of 6.3 % return in 51 days. If CAVM is higher than $33.00 on 12/22/2012, we are assured that simple return. For comparison purposes only, that equates to an annualized return rate of 45.4 %.

SolarWinds (NYSE: SWI) has been selected by InvestorsObserver analysts as a stock that is a strong candidate for a new covered call today. Selling the January $50.00 call while simultaneously buying SWI stock for $50.59 will result in a new position with a break-even point around $46.79. At that price, this position has a target return of 6.9 %. This trade has 7.5 % downside protection, while still providing a 6.9 % return in 79 days as long as SWI is above $50.00 on 1/19/2013. For comparison purposes only, this SolarWinds covered call targets an annualized return rate of 31.7 %.

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