After Dec 6, 2018’s trading in Targa Resources (TRGP) MarketIntelligenceCenter.com's patented algorithms uncovered a trade that offers a 4.26% return or 37.08% on an annualized basis (for comparison purposes only), while providing 5.49% downside protection.
The trade is a Jan 18, 2019 covered call at the $43 level for a net debit of about $41.24. 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 17, 2020 at the $33 level. By buying the call for $11.55 instead of paying about $43.63 for the stock, the assigned return rate for this alternate trade is 9.28%, but the stock has to finish above $42.14 when the sold call expires for this trade to be profitable.
Standard & Poor’s has a 3 STARS (out of 5) hold ranking on Targa Resources. Technical indicators for the stock have been bearish and support and resistance have been in the area of $41.34 and $45.58, respectively.