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Potential Royal Gold (RGLD) Trade Could Hit 3% Return

May 17, 2018 (Marketintelligencecenter.com via COMTEX) --

The patented option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center are highlighting two trades on Royal Gold (<a href="http://www.marketintelligencecenter.com/symbol/RGLD">RGLD</a>) today after it closed at $88.25 on May 16, 2018. For more conservative investors, look at a covered call using the Jul 20, 2018 $87.50 call for a net debit of about $84.95. This trade will return 3% (17.11% annualized, for comparison purposes only) as long as the stock closes above $87.50 at expiration. Royal GoldAcan fall 3.73% before causing a problem. For investors with a higher appetite for risk, consider a diagonal spread with a Jan 18, 2019 $45 call taking the place of the long stock position and the same short position in the Jul 20, 2018 $87.50 call. This trade only costs about $41.10 to get into and the rate of return increases to 3.40% (17.11% annualized, for comparison purposes only) but the downside protection falls to 2.43%.

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