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Cisco Systems (NASDAQ: CSCO) has been identified by InvestorsObserver analysts as being well-positioned for a new covered call today. Buying the stock for $18.31 while selling the April $18.00 call will produce a new covered call with a break-even point around $16.76. At that price, this position has a target return of 7.4 %. This trade will have roughly 8.5 % downside protection, while still aiming for a 7.4 % return in 191 days. It will lock in that return as long as Cisco Systems is above $18.00 on 4/20/2013. For comparison purposes only, this CSCO covered call aims for an annualized return rate of 14.1 %.

Southwestern Energy (NYSE: SWN) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $35.08 while simultaneously selling the November $35.00 call will result in a new position with a target return of 4.8 %. Based on recent prices, this position will cost about $33.39, which is also the trade’s breakeven point. At that level, this covered call has 4.8 % downside protection, while still providing a 4.8 % return in 37 days as long as SWN is above $35.00 on 11/17/2012. For comparison purposes only, this Southwestern Energy covered call aims for an annualized return rate of 47.5 %.

Williams Sonoma (NYSE: WSM) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $45.65 while simultaneously selling the January $45.00 call will result in a new position with a target return of 5.5 %. Based on recent prices, this position will cost about $42.65, which is also the trade’s breakeven point. At that level, this covered call has 6.6 % downside protection, while still providing a 5.5 % return in 100 days as long as WSM is above $45.00 on 1/19/2013. For comparison purposes only, this Williams Sonoma covered call aims for an annualized return rate of 20.1 %.

 

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Sotheby's (NYSE: BID) has been chosen by InvestorsObserver analysts as a candidate for a new covered call today. Selling the January $30.00 call while at the same time buying BID stock for $30.75 will produce a new covered call with a target return of 6.6 %. Based on recent data, this trade will cost about $28.15, which is also the covered call’s breakeven point. At that price, this covered call has 8.5 % downside protection, while seeking an assigned return of 6.6 % return in 100 days. If BID is higher than $30.00 on 1/19/2013, we are assured that simple return. For comparison purposes only, that equates to an annualized return rate of 24.0 %.

Harmony Gold Mining (NYSE: HMY) has been selected by InvestorsObserver analysts as a stock that is a strong candidate for a new covered call today. Selling the May $8.00 call while simultaneously buying HMY stock for $8.08 will result in a new position with a break-even point around $6.98. At that price, this position has a target return of 14.6 %. This trade has 13.6 % downside protection, while still providing a 14.6 % return in 219 days as long as HMY is above $8.00 on 5/18/2013. For comparison purposes only, this Harmony Gold Mining covered call targets an annualized return rate of 24.4 %.

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