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Potential Lumber Liquidators (LL) Trade Has 12.03% Downside Protection

Dec 07, 2017 ( via COMTEX) --

The patented option-trade picking algorithms that power's Artificial Intelligence Center are highlighting two trades on Lumber Liquidators (<a href="">LL</a>) today after it closed at $29.07 on Dec 6, 2017. For more conservative investors, look at a covered call using the Feb 16, 2018 $27 call for a net debit of about $25.57. This trade will return 5.55% (28.53% annualized, for comparison purposes only) as long as the stock closes above $27 at expiration. Lumber LiquidatorsAcan fall 12.03% before causing a problem. For investors with a higher appetite for risk, consider a diagonal spread with a Jan 18, 2019 $3 call taking the place of the long stock position and the same short position in the Feb 16, 2018 $27 call. This trade only costs about $23.15 to get into and the rate of return increases to 3.67% (28.53% annualized, for comparison purposes only) but the downside protection falls to 10.07%.

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