General Motors: Potential 22.7% Return With Covered Calls (Technical Analysis)

Summary:

  • Sell covered calls on GM for a potential 22.7% annualized return, with GM trading at $44.75 and March’s $45.00 calls priced at $4.30.
  • Earn $479 profit from call premium, stock appreciation, and dividends on a $4,475 investment if GM trades above $45.00 by March 21.
  • Profit even if GM stays below $45.00, down to a net stock price of $40.21, reducing risk through covered calls.
  • Selling covered calls on GM offers a strategic approach to managing uncertainty and generating consistent returns.
  • GM is showing impressive improvements, and GM’s EPS and P/E ratio trends provide reasonable indications of stock price appreciation.

General Motors headquarters at the Renaissance Center in downtown Detroit. In 1996, GM purchased the complex.

jetcityimage/iStock Editorial via Getty Images

Summary

  • A possible 22.7% annualized return from GM, including covered call premium, price appreciation, and dividend, is possible.
  • GM is showing impressive improvements.
  • Announced a new $6B share repurchase authorization, on track to achieve their target of


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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