{"id":63719,"date":"2020-10-22T11:10:41","date_gmt":"2020-10-22T15:10:41","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=63719"},"modified":"2022-11-21T09:46:30","modified_gmt":"2022-11-21T14:46:30","slug":"preparing-for-a-vaccine-with-call-options","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/options\/preparing-for-a-vaccine-with-call-options\/","title":{"rendered":"Preparing for a Vaccine With Call Options"},"content":{"rendered":"\n

The gods must have an evil sense of humor.<\/p>\n\n\n\n

Covid-19 has forced tens of millions of people to spend more time than ever before at home\u2014often glued to TVs or computer screens\u2014and everyone is under a nearly constant assault of nasty political ads<\/a>.<\/p>\n\n\n\n

The content is so grating and outrageous that PsyOps warriors could stream the ads to psychologically weaken enemy combatants instead of blaring hysterically crying babies. By Nov. 3, the nastiness may end\u2014or begin anew\u2014when the world learns whether Donald Trump will remain president or if Joe Biden, his Democratic challenger, will succeed him.<\/p>\n\n\n\n

Many polls predict that Biden will win<\/a>, and some suggest that Trump\u2019s loss will be profound. It\u2019s dangerous to be overconfident, though much of Wall Street now is. When Trump last ran, Hillary Clinton was expected to trounce him\u2014and the Street was wrong in a \u201cDewey Beats Truman\u201d kind of way.<\/p>\n\n\n\n

It\u2019s time to start looking past the political theater to what happens next. Eventually, Covid-19 will be controlled by a vaccine<\/a>. When that happens, restaurants will once more flourish, people will travel, and the financial and commercial real estate sectors will probably normalize.<\/p>\n\n\n\n

Without a doubt, wagering on vaccines, like much pharmaceutical-sector investing, is hard for anyone without specialized scientific knowledge. The key to covering the knowledge gap is focusing on the companies that would benefit from a vaccine and finding a reasonably cost-effective way to invest.<\/p>\n\n\n\n

John Marshall, a Goldman Sachs<\/a> derivatives strategist, recently advised clients to consider 35 stocks that would benefit when the economy fully reopens. The stocks have trailed the S&P 500 index<\/a> by about 10% over the past month and about 48% this year. \u201cThe reopening trade does not appear crowded,\u201d Marshall wrote in a recent note.<\/p>\n\n\n\n

Goldman\u2019s \u201cPositive Reopening Reactors\u201d include American Airlines Group <\/a>(ticker: AAL), Alaska Air Group<\/a> (ALK), Delta Air Lines<\/a> (DAL), SL Green Realty<\/a> (SLG), United Airlines Holdings<\/a> (UAL), Simon Property Group<\/a> (SPG), Boeing<\/a> (BA), Zions Bancorp<\/a> (ZION), Host Hotels & Resorts<\/a> (HST), Kohl’s<\/a> (KSS), Kimco Realty<\/a> (KIM), PVH<\/a> (PVH), Wells Fargo<\/a> (WFC), and Huntington Bancshares<\/a> (HBAN).<\/p>\n\n\n\n

Others include Norwegian Cruise Line Holdings<\/a> (NCLH), Textron<\/a> (TXT), Loews<\/a> (L), Boston Properties<\/a> (BXP), Carnival<\/a> (CCL), Federal Realty Investment Trust<\/a> (FRT), U.S. Bancorp<\/a> (USB), Nordstrom<\/a> (JWN), Prudential<\/a> (PRU), UDR<\/a> (UDR), Marriott International<\/a> (MAR), Royal Caribbean Group<\/a> ( RCL<\/a> ), Ralph Lauren<\/a> (RL), Vornado Realty Trust<\/a> (VNO), Southwest Airlines<\/a> (LUV), CBRE Group<\/a> (CBRE), Regency Centers<\/a> (REG), Equity Residential<\/a> (EQR), Raytheon Technologies<\/a> (RTX), Essex Property Trust<\/a> (ESS), and General Electric<\/a> (GE).<\/p>\n\n\n\n

Goldman told clients to buy bullish call options<\/a> on the stocks, an approach that costs less than buying equities. (Calls give the holder the right to buy a security at a set price and time.) Timing is key, so look for stocks that are intriguing, choose one-month expirations, and pick strike prices that are 5% to 10% above the stock price. The average 10% out-of-the-money call on the group costs about 2.9% of the stock price.<\/p>\n\n\n\n

Using calls as stock surrogates is risky. Buying call options on stocks that don\u2019t advance, or that decline, often generates losses. Once a call is bought, be prepared to sell it once it nears expiration and to \u201croll\u201d into the next month, ideally by buying another call that costs less or the same amount. Sometimes, more money is needed to adjust the trade.<\/p>\n\n\n\n

This style of investing isn\u2019t for everyone. It\u2019s hard to identify compelling themes, and cost-effectively control investments, while waiting for the upside to emerge. Those who can, however, often find themselves on the right side of events.<\/p>\n\n\n\n

—<\/p>\n\n\n\n

Originally Posted on October 22, 2020 – Preparing for a Vaccine With Call Options<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Eventually, Covid-19 will be controlled by a vaccine. When that happens, restaurants will once more flourish, people will travel, and the financial and commercial real estate sectors will probably normalize.<\/p>\n","protected":false},"author":31,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6,19,8,9,22,26,3],"tags":[3358,6585],"contributors-categories":[13583],"class_list":{"0":"post-63719","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-north-america","7":"category-options","8":"category-region","9":"category-securities","10":"category-stocks","11":"category-text-articles","12":"category-traders-insight","13":"tag-call-options","14":"tag-covid-19","15":"contributors-categories-barrons"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"\nPreparing for a Vaccine With Call Options | Traders' Insight<\/title>\n<meta name=\"description\" content=\"Eventually, Covid-19 will be controlled by a vaccine. When that happens, restaurants will once more flourish, people will travel, and the financial and...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.interactivebrokers.com\/campus\/wp-json\/wp\/v2\/posts\/63719\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Preparing for a Vaccine With Call Options | IBKR Campus US\" \/>\n<meta property=\"og:description\" content=\"Eventually, Covid-19 will be controlled by a vaccine. When that happens, restaurants will once more flourish, people will travel, and the financial and commercial real estate sectors will probably normalize.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/options\/preparing-for-a-vaccine-with-call-options\/\" \/>\n<meta property=\"og:site_name\" content=\"IBKR Campus US\" \/>\n<meta property=\"article:published_time\" content=\"2020-10-22T15:10:41+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-11-21T14:46:30+00:00\" \/>\n<meta name=\"author\" content=\"Steven M. Sears\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Steven M. Sears\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\n\t \"@context\": \"https:\\\/\\\/schema.org\",\n\t \"@graph\": [\n\t {\n\t \"@type\": \"NewsArticle\",\n\t \"@id\": \"https:\\\/\\\/www.interactivebrokers.com\\\/campus\\\/traders-insight\\\/securities\\\/options\\\/preparing-for-a-vaccine-with-call-options\\\/#article\",\n\t \"isPartOf\": {\n\t \"@id\": \"https:\\\/\\\/www.interactivebrokers.com\\\/campus\\\/traders-insight\\\/securities\\\/options\\\/preparing-for-a-vaccine-with-call-options\\\/\"\n\t },\n\t \"author\": {\n\t \"name\": \"Steven M. Sears\",\n\t \"@id\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/#\\\/schema\\\/person\\\/0ea65db09e0994754c2de4316c083f30\"\n\t },\n\t \"headline\": \"Preparing for a Vaccine With Call Options\",\n\t \"datePublished\": \"2020-10-22T15:10:41+00:00\",\n\t \"dateModified\": \"2022-11-21T14:46:30+00:00\",\n\t \"mainEntityOfPage\": {\n\t \"@id\": \"https:\\\/\\\/www.interactivebrokers.com\\\/campus\\\/traders-insight\\\/securities\\\/options\\\/preparing-for-a-vaccine-with-call-options\\\/\"\n\t },\n\t \"wordCount\": 694,\n\t \"publisher\": {\n\t \"@id\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/#organization\"\n\t },\n\t \"keywords\": [\n\t \"call options\",\n\t \"Covid-19\"\n\t ],\n\t \"articleSection\": [\n\t \"North America\",\n\t \"Options\",\n\t \"Region\",\n\t \"Securities\",\n\t \"Stocks\",\n\t \"Text Articles\",\n\t \"Traders' Insight\"\n\t ],\n\t \"inLanguage\": \"en-US\"\n\t },\n\t {\n\t \"@type\": \"WebPage\",\n\t \"@id\": \"https:\\\/\\\/www.interactivebrokers.com\\\/campus\\\/traders-insight\\\/securities\\\/options\\\/preparing-for-a-vaccine-with-call-options\\\/\",\n\t \"url\": \"https:\\\/\\\/www.interactivebrokers.com\\\/campus\\\/traders-insight\\\/securities\\\/options\\\/preparing-for-a-vaccine-with-call-options\\\/\",\n\t \"name\": \"Preparing for a Vaccine With Call Options | IBKR Campus US\",\n\t \"isPartOf\": {\n\t \"@id\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/#website\"\n\t },\n\t \"datePublished\": \"2020-10-22T15:10:41+00:00\",\n\t \"dateModified\": \"2022-11-21T14:46:30+00:00\",\n\t \"description\": \"Eventually, Covid-19 will be controlled by a vaccine. When that happens, restaurants will once more flourish, people will travel, and the financial and commercial real estate sectors will probably normalize.\",\n\t \"inLanguage\": \"en-US\",\n\t \"potentialAction\": [\n\t {\n\t \"@type\": \"ReadAction\",\n\t \"target\": [\n\t \"https:\\\/\\\/www.interactivebrokers.com\\\/campus\\\/traders-insight\\\/securities\\\/options\\\/preparing-for-a-vaccine-with-call-options\\\/\"\n\t ]\n\t }\n\t ]\n\t },\n\t {\n\t \"@type\": \"WebSite\",\n\t \"@id\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/#website\",\n\t \"url\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/\",\n\t \"name\": \"IBKR Campus US\",\n\t \"description\": \"Financial Education from Interactive Brokers\",\n\t \"publisher\": {\n\t \"@id\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/#organization\"\n\t },\n\t \"potentialAction\": [\n\t {\n\t \"@type\": \"SearchAction\",\n\t \"target\": {\n\t \"@type\": \"EntryPoint\",\n\t \"urlTemplate\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/?s={search_term_string}\"\n\t },\n\t \"query-input\": {\n\t \"@type\": \"PropertyValueSpecification\",\n\t \"valueRequired\": true,\n\t \"valueName\": \"search_term_string\"\n\t }\n\t }\n\t ],\n\t \"inLanguage\": \"en-US\"\n\t },\n\t {\n\t \"@type\": \"Organization\",\n\t \"@id\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/#organization\",\n\t \"name\": \"Interactive Brokers\",\n\t \"alternateName\": \"IBKR\",\n\t \"url\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/\",\n\t \"logo\": {\n\t \"@type\": \"ImageObject\",\n\t \"inLanguage\": \"en-US\",\n\t \"@id\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/#\\\/schema\\\/logo\\\/image\\\/\",\n\t \"url\": \"https:\\\/\\\/www.interactivebrokers.com\\\/campus\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2024\\\/05\\\/ibkr-campus-logo.jpg\",\n\t \"contentUrl\": \"https:\\\/\\\/www.interactivebrokers.com\\\/campus\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2024\\\/05\\\/ibkr-campus-logo.jpg\",\n\t \"width\": 669,\n\t \"height\": 669,\n\t \"caption\": \"Interactive Brokers\"\n\t },\n\t \"image\": {\n\t \"@id\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/#\\\/schema\\\/logo\\\/image\\\/\"\n\t },\n\t \"publishingPrinciples\": \"https:\\\/\\\/www.interactivebrokers.com\\\/campus\\\/about-ibkr-campus\\\/\",\n\t \"ethicsPolicy\": \"https:\\\/\\\/www.interactivebrokers.com\\\/campus\\\/cyber-security-notice\\\/\"\n\t },\n\t {\n\t \"@type\": \"Person\",\n\t \"@id\": \"https:\\\/\\\/ibkrcampus.com\\\/campus\\\/#\\\/schema\\\/person\\\/0ea65db09e0994754c2de4316c083f30\",\n\t \"name\": \"Steven M. Sears\",\n\t \"description\": \"Steven M. Sears is the president, chief operating officer and co-founder of Options Solutions. The investment firm uses conservative options strategies to help clients enhance stock returns and reduce risk. Mr. Sears has deep experience in the options industry as an investor, exchange executive, and journalist.\",\n\t \"url\": \"https:\\\/\\\/www.interactivebrokers.com\\\/campus\\\/author\\\/steven-m-sears\\\/\"\n\t }\n\t ]\n\t}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Preparing for a Vaccine With Call Options | Traders' Insight","description":"Eventually, Covid-19 will be controlled by a vaccine. When that happens, restaurants will once more flourish, people will travel, and the financial and...","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.interactivebrokers.com\/campus\/wp-json\/wp\/v2\/posts\/63719\/","og_locale":"en_US","og_type":"article","og_title":"Preparing for a Vaccine With Call Options | IBKR Campus US","og_description":"Eventually, Covid-19 will be controlled by a vaccine. When that happens, restaurants will once more flourish, people will travel, and the financial and commercial real estate sectors will probably normalize.","og_url":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/options\/preparing-for-a-vaccine-with-call-options\/","og_site_name":"IBKR Campus US","article_published_time":"2020-10-22T15:10:41+00:00","article_modified_time":"2022-11-21T14:46:30+00:00","author":"Steven M. Sears","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Steven M. Sears","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"NewsArticle","@id":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/options\/preparing-for-a-vaccine-with-call-options\/#article","isPartOf":{"@id":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/options\/preparing-for-a-vaccine-with-call-options\/"},"author":{"name":"Steven M. Sears","@id":"https:\/\/ibkrcampus.com\/campus\/#\/schema\/person\/0ea65db09e0994754c2de4316c083f30"},"headline":"Preparing for a Vaccine With Call Options","datePublished":"2020-10-22T15:10:41+00:00","dateModified":"2022-11-21T14:46:30+00:00","mainEntityOfPage":{"@id":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/options\/preparing-for-a-vaccine-with-call-options\/"},"wordCount":694,"publisher":{"@id":"https:\/\/ibkrcampus.com\/campus\/#organization"},"keywords":["call options","Covid-19"],"articleSection":["North America","Options","Region","Securities","Stocks","Text Articles","Traders' Insight"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/options\/preparing-for-a-vaccine-with-call-options\/","url":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/options\/preparing-for-a-vaccine-with-call-options\/","name":"Preparing for a Vaccine With Call Options | IBKR Campus US","isPartOf":{"@id":"https:\/\/ibkrcampus.com\/campus\/#website"},"datePublished":"2020-10-22T15:10:41+00:00","dateModified":"2022-11-21T14:46:30+00:00","description":"Eventually, Covid-19 will be controlled by a vaccine. When that happens, restaurants will once more flourish, people will travel, and the financial and commercial real estate sectors will probably normalize.","inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/options\/preparing-for-a-vaccine-with-call-options\/"]}]},{"@type":"WebSite","@id":"https:\/\/ibkrcampus.com\/campus\/#website","url":"https:\/\/ibkrcampus.com\/campus\/","name":"IBKR Campus US","description":"Financial Education from Interactive Brokers","publisher":{"@id":"https:\/\/ibkrcampus.com\/campus\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/ibkrcampus.com\/campus\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/ibkrcampus.com\/campus\/#organization","name":"Interactive Brokers","alternateName":"IBKR","url":"https:\/\/ibkrcampus.com\/campus\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ibkrcampus.com\/campus\/#\/schema\/logo\/image\/","url":"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/ibkr-campus-logo.jpg","contentUrl":"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/ibkr-campus-logo.jpg","width":669,"height":669,"caption":"Interactive Brokers"},"image":{"@id":"https:\/\/ibkrcampus.com\/campus\/#\/schema\/logo\/image\/"},"publishingPrinciples":"https:\/\/www.interactivebrokers.com\/campus\/about-ibkr-campus\/","ethicsPolicy":"https:\/\/www.interactivebrokers.com\/campus\/cyber-security-notice\/"},{"@type":"Person","@id":"https:\/\/ibkrcampus.com\/campus\/#\/schema\/person\/0ea65db09e0994754c2de4316c083f30","name":"Steven M. Sears","description":"Steven M. Sears is the president, chief operating officer and co-founder of Options Solutions. The investment firm uses conservative options strategies to help clients enhance stock returns and reduce risk. Mr. Sears has deep experience in the options industry as an investor, exchange executive, and journalist.","url":"https:\/\/www.interactivebrokers.com\/campus\/author\/steven-m-sears\/"}]}},"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/posts\/63719","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/users\/31"}],"replies":[{"embeddable":true,"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/comments?post=63719"}],"version-history":[{"count":0,"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/posts\/63719\/revisions"}],"wp:attachment":[{"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/media?parent=63719"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/categories?post=63719"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/tags?post=63719"},{"taxonomy":"contributors-categories","embeddable":true,"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/contributors-categories?post=63719"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}