Option Investor

Option Writer Portfolio - April

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USB - U.S. Bancorp operates as the holding company for U.S. Bank that provides commercial banking and financial services in the United States. It generates various deposit products, including checking accounts, savings accounts, money market savings, and time certificates of deposit accounts. The company also originates a portfolio of loans comprising commercial loans and lease financing; commercial real estate; residential mortgage; and retail loans, including credit card, retail leasing, home equity and second mortgages, and other retail loans.

Sector - Financial

Industry - Regional Bank

EPS Date - April 15th

The trade is to sell 3 contracts of the 30 strike. This is a little more aggressive than some of the other suggestions. However, the assigned amount is less than our average of $10,000. More aggressive option writers can sell up to 9 contracts and still have margin buffer. There is support at the 30 level and also the 27.80 level. USB is one of the few financials that have stayed steady in price. JPM is another.

A break below 30.40 will be our technical stop. A close below the uptrend line could be an early exit point as well.

Risk Management for USB
Strike Stop = $ 30.00
Cost Basis Stop = $ 29.20
Technical Stop = $ 30.40
Premium Stop = $ 30.36

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