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Potential Royal Gold (RGLD) Trade Could Hit 2.45% Return

Jan 03, 2018 ( via COMTEX) --

The patented option-trade picking algorithms that power's Artificial Intelligence Center Aare highlighting two trades on Royal Gold (<a href="">RGLD</a>) today after it closed at $83.91 on Jan 2, 2018. For more conservative investors, look at a covered call using the Feb 16, 2018 $82.50 call for a net debit of about $80.51. This trade will return 2.45% (20.39% annualized, for comparison purposes only) as long as the stock closes above $82.50 at expiration. Royal Gold can fall 4.05% before causing a problem. For investors with a higher appetite for risk, consider a diagonal spread with a Jan 18, 2019 $37.50 call taking the place of the long stock position and the same short position in the Feb 16, 2018 $82.50 call. This trade only costs about $43.85 to get into and the rate of return increases to 2.62% (20.39% annualized, for comparison purposes only) but the downside protection falls to 3.06%.

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