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Potential Lumber Liquidators (LL) Trade Has 14.33% Downside Protection

Jan 02, 2018 ( 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 $31.37 on Dec 29, 2017. For more conservative investors, look at a covered call using the May 18, 2018 $30 call for a net debit of about $26.89. This trade will return 11.56% (31.03% annualized, for comparison purposes only) as long as the stock closes above $30 at expiration. Lumber LiquidatorsAcan fall 14.33% before causing a problem. For investors with a higher appetite for risk, consider a diagonal spread with a Jan 18, 2019 $10 call taking the place of the long stock position and the same short position in the May 18, 2018 $30 call. This trade only costs about $18.14 to get into and the rate of return increases to 10.16% (31.03% annualized, for comparison purposes only) but the downside protection falls to 10.32%.

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