Option Investor

Option Writer Portfolio - May

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USB - U.S. Bancorp and its subsidiaries is a multi-state financial services holding company. The Company provides financial services, including lending and depository services in 24 states. It also provides credit card, merchant, and automated teller machine (ATM) processing, mortgage banking, insurance, trust and investment management, brokerage, and leasing activities in domestic markets. Earnings are due out on April 15th. So there is some potential volatility from that.

USB was fairly good to us in April and the chart still looks pretty good. Contrary to most financial stocks, USB's price has been consolidating between 30 and 35 with a slight upside bias. We can only sell 4 contracts before over allocating. However, the more speculative traders out there can sell 8 contracts and still have room for a little volatility in the price and margin requirement.

Risk Management for USB
Strike Stop = $ 30.00
Cost Basis Stop = $ 29.48
Technical Stop = $ 30.20
Premium Stop = $ 31.16

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