April 9, 2020 - MDT Alert (FRO)

As you know, the markets are closed tomorrow for Good Friday, so I would like to make a suggestion on a covered call in order to capture the time decay over the long holiday weekend.

My suggestion is to buy Frontline Ltd.(FRO), which is trading at $8.58 as I write this.

Then sell to open (1) April 17th - $9 call for every 100 share you buy.

You should be able to sell them for $0.50.

Limit the stock buy in to 500 shares, which works out to 4.3% of the portfolio.

Assuming you buy 500 shares, it will mean you will sell 5 of the April 17th - $9 calls.

I am limiting the trade to less than 5% of the portfolio based on the extreme market conditions at the moment.

If the calls are assigned next Friday, the return will be 10.7% for just over a week.

Because the markets are closed tomorrow, there will not be a daily update.

Enjoy your Easter or Passover.

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