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Embraer Empresa Brasileira de Aeronautics (NYSE: ERJ) has been selected by InvestorsObserver analysts as a stock that is a strong candidate for a new covered call today. Selling the January $30.00 call while simultaneously buying ERJ stock for $27.57 will result in a new position with a break-even point around $26.37. At that price, this position has a target return of 13.8 %. This trade has 4.4 % downside protection, while still providing a 13.8 % return in 99 days as long as ERJ is above $30.00 on 1/19/2013. For comparison purposes only, this Embraer Empresa Brasileira de Aeronautics covered call targets an annualized return rate of 50.7 %.

Microsoft (NASDAQ: MSFT) has been identified by InvestorsObserver analysts as being well-positioned for a new covered call today. Buying the stock for $28.95 while selling the January $29.00 call will produce a new covered call with a break-even point around $27.79. At that price, this position has a target return of 4.4 %. This trade will have roughly 4.0 % downside protection, while still aiming for a 4.4 % return in 99 days. It will lock in that return as long as Microsoft is above $29.00 on 1/19/2013. For comparison purposes only, this MSFT covered call aims for an annualized return rate of 16.0 %.

Cliffs Natural Resources (NYSE: CLF) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $40.98 while simultaneously selling the January $40.00 call will result in a new position with a target return of 9.2 %. Based on recent prices, this position will cost about $36.63, which is also the trade’s breakeven point. At that level, this covered call has 10.6 % downside protection, while still providing a 9.2 % return in 99 days as long as CLF is above $40.00 on 1/19/2013. For comparison purposes only, this Cliffs Natural Resources covered call aims for an annualized return rate of 33.9 %.

Barclays (NYSE: BCS) has been chosen by InvestorsObserver analysts as a candidate for a new covered call today. Selling the January $14.00 call while at the same time buying BCS stock for $14.82 will produce a new covered call with a target return of 7.5 %. Based on recent data, this trade will cost about $13.02, which is also the covered call’s breakeven point. At that price, this covered call has 12.1 % downside protection, while seeking an assigned return of 7.5 % return in 99 days. If BCS is higher than $14.00 on 1/19/2013, we are assured that simple return. For comparison purposes only, that equates to an annualized return rate of 27.7 %.

Petroleo Brasileiro (NYSE: PBR) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $22.82 while simultaneously selling the January $22.00 call will result in a new position with a target return of 4.9 %. Based on recent prices, this position will cost about $20.97, which is also the trade’s breakeven point. At that level, this covered call has 8.1 % downside protection, while still providing a 4.9 % return in 99 days as long as PBR is above $22.00 on 1/19/2013. For comparison purposes only, this Petroleo Brasileiro covered call aims for an annualized return rate of 18.1 %.

 

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