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Option Writer Update

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US Bancorp (USB) is on our list again as a put play. We are writing (selling to open) the June 32.5 put options for about $0.70 per contract. The company remains to be one of the only financial stocks that isn't or hasn't been beaten up. It has been in a relatively tight trading range between 30 to 35 over the past few months. Selling the 32.5 strike is more aggressive in that the price of the stock is only $1.30 out of the money at 33.80 or so. The initial return is low too. Probably due to the earnings announcement being in the past and no corporate announcements scheduled in the nest 5 weeks.

Risk Management for USB
Strike Stop = $ 32.50
Cost Basis Stop = $ 31.80
Technical Stop = $ 32.30
Premium Stop = $ 32.20

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