Volatility surge has trader eyeing one 'stable' stock

Sell CI July put for $6Max gain: $60Max loss: $276Skill level: IntermediateTwo things can happen, and either is acceptable. If CI stays above $280 through expiration, we keep the premium — roughly 2% on the cash securing the trade in about six weeks, an annualized yield in the mid-teens for agreeing to buy a 9.5x-earnings business at a discount.If CI dips below $280 and we're assigned, our effective basis is around $274 a 5% discount to the current price and comfortably above the lower half of the 52-week range. From there, the second phase of the strategy kicks in: collect the dividend and systematically sell covered calls against the position, turning a stable managed-care franchise into a persistent income generator.Like any trade, this isn't entirely riskless.

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