Tapestry (TPR) [formerly Coach] is a high quality fashion brand. This stock is great for income trading with little downside.
Reminder, when you sell a put, you get paid up front for agreeing to buy a stock at a lower price (strike price). If the stock drops below that price by the expiration date, you buy shares. If it holds above the strike price, you walk away with the cash. The most important rule is to only sell puts on companies you are willing to own.
Tapestry is a $12 billion company and operates more than 1,000 stores around the world, selling handbags, wallets, clothes, footwear, jewelry, and other high-end accessories.
Tapestry has been in an uptrend over the past few years.
Trade:
Sell the January 2018, $41 puts on Tapestry for $1.25 limit order. For an instant 3% payout on your purchase price. If you are put the stock on expiration day you will have bought at a 1.2% discount to current prices.
Best case is Tapestry holds above $41 through expiration day on January 19 realizing a 22.3% annualized return.
If Tapestry closes below $41 on expiration day, put sellers will buy shares and then you can sell covered calls to generate more income.
Option Return Calculator click here
Use a stop loss of $37.75.
Tapestry is a strong business that trades at a good price and in an uptrend.
Take advantage of the short term pullback and generate great income!
Thank you for your reading.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.