The patented option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center are highlighting two trades on Cisco Systems (CSCO) today after it closed at $43.24 on Jan 10, 2019.
For more conservative investors, look at a covered call using the Feb 15, 2019 $43 call for a net debit of about $41.42. This trade will return 3.81% (39.78% annualized, for comparison purposes only) as long as the stock closes above $43 at expiration. Cisco Systems can fall 4.20% before causing a problem.
For investors with a higher appetite for risk, consider a diagonal spread with a Jan 17, 2020 $28 call taking the place of the long stock position and the same short position in the Feb 15, 2019 $43 call. This trade only costs about $14.33 to get into and the rate of return increases to 4.67% (39.78% annualized, for comparison purposes only) but the downside protection falls to 2.10%.