Excelon Corp (EXC)

[Porgie Tirebiter]

EXC below $40 is a great buy.

I like this for a six month trade: One could buy 100 shares for $3,984 and write a JUL 42 call for 45¢ bringing the effective price for 100 shares down to $3,939. Add to that the May dividend of .525 and the basis on the trade is down to $3,886.50. Should EXC trade above $42 by expiration, the 100 shares get called for $4,200 giving the trade an annualized yield of a little over 16%... Not too shabby.

Should EXC languish below $42 by expiration, you keep the premium and have added 100 shares in a stock you want to own anyway at a cost of $39.39 per share. That produces an effective yield of 5.33% on those particular shares.

Those numbers are based on Friday's close and a trade like this is best done in a non-tax account.