The patented option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center are highlighting two trades on McKesson (MCK) today after it closed at $122.04 on Jan 10, 2019.
For more conservative investors, look at a covered call using the Feb 15, 2019 $120 call for a net debit of about $116.24. This trade will return 3.23% (33.73% annualized, for comparison purposes only) as long as the stock closes above $120 at expiration. McKesson can fall 4.75% before causing a problem.
For investors with a higher appetite for risk, consider a diagonal spread with a Jan 17, 2020 $65 call taking the place of the long stock position and the same short position in the Feb 15, 2019 $120 call. This trade only costs about $53.35 to get into and the rate of return increases to 3.09% (33.73% annualized, for comparison purposes only) but the downside protection falls to 3.02%.