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Hello all,

I am relatively new to this FORUM and posting so please respond appropriately given my lack of knowledge. I currently have many shares of AL which i would be willing to sell in the future for the right price. I believe in the company and want to remain an investor in the company but wouldn't care if I sold some of my shares at the right price in the future to use that capital to diversify some in other companies. All shares i own were bought around the $27-32 range. I was thinking of setting up a Call option for selling in hopes of making income on these positions for a while but wanted the opinions of TMF team on what Call option looks good. Any help or opinion on a good way to analyze this would be appreciated. The Aug 40-45 Calls look okay however i would be interested in hearing from the experts in the community.

Thanks in advance!
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Hck - Welcome to options and wishing you great success.

The particular strike & expiration date that you choose depends on your objectives and to what degree you are comfortable risking having your shares called away. Generally speaking, the higher you set the strike, the lower will be your yield & your risk of losing the shares. The farther out you set the expiration date, the higher will be your premium in absolute dollar terms, but it will be lower in yield terms.

Should you prefer to be more aggressive (that is, earn a higher yield while increasing your risk of assignment), you can select a lower strike price.
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Hck,

I don't know anything about AL, but I'll tell you what I would do/done in a situation like yours.

First, you have earnings between April and May monthly options. I tend to shy away from options trading around earnings unless I'm doing an option play.

For me, I'd wait until after earnings. The Jun options will be available after the April options expire. So I would pick either the May (closer to ATM) or Jun options possibly further from ATM.

Let's say, the price stays around $38. I may sell a $40 Call if I can get $0.50+.

Just my 2 cents.
Horb
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