While a target to 19 projected by Craig-Hallum at Schwab might seem too optimisitc, at least the downside from the current level of 10.30 is tamed; that said, I love to load on call-writes and have the shares get taken away for a nice juicy premium! The downside is limited given the company’s continual profitability, significant free cash flow generation and current low valuation.
Tomorrow, I will examine the May strike 10 and 11 calls. I will most likely write strike 10 because they not only provide a mild hedge against the inderlying shares but surprisingly offer .10 cents per contract in additional time value. It's very rare that a lower strike offers both more intrinsic time value and a protective hedge to the downside.
For every 1000 shares, May strike 10 calls will give you .50/contract in time value compared to .30/contract with strike 11 calls.