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Abercrombie and Fitch (NYSE: ANF) has been chosen by InvestorsObserver analysts as a candidate for a new covered call today. Selling the February $29.00 call while at the same time buying ANF stock for $31.34 will produce a new covered call with a target return of 7.8 %. Based on recent data, this trade will cost about $26.89, which is also the covered call’s breakeven point. At that price, this covered call has 14.2 % downside protection, while seeking an assigned return of 7.8 % return in 95 days. If ANF is higher than $29.00 on 2/16/2013, we are assured that simple return. For comparison purposes only, that equates to an annualized return rate of 30.1 %.

Best Buy (NYSE: BBY) has been selected by InvestorsObserver analysts as a stock that is a strong candidate for a new covered call today. Selling the March $14.00 call while simultaneously buying BBY stock for $15.85 will result in a new position with a break-even point around $12.65. At that price, this position has a target return of 10.7 %. This trade has 20.2 % downside protection, while still providing a 10.7 % return in 123 days as long as BBY is above $14.00 on 3/16/2013. For comparison purposes only, this Best Buy covered call targets an annualized return rate of 31.7 %.

 

Caterpillar (NYSE: CAT) has been identified by InvestorsObserver analysts as being well-positioned for a new covered call today. Buying the stock for $85.18 while selling the May $80.00 call will produce a new covered call with a break-even point around $75.43. At that price, this position has a target return of 6.1 %. This trade will have roughly 11.4 % downside protection, while still aiming for a 6.1 % return in 186 days. It will lock in that return as long as Caterpillar is above $80.00 on 5/18/2013. For comparison purposes only, this CAT covered call aims for an annualized return rate of 11.9 %.

 

Celgene (NASDAQ: CELG) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $75.66 while simultaneously selling the April $72.50 call will result in a new position with a target return of 6.5 %. Based on recent prices, this position will cost about $68.06, which is also the trade’s breakeven point. At that level, this covered call has 10.0 % downside protection, while still providing a 6.5 % return in 158 days as long as CELG is above $72.50 on 4/20/2013. For comparison purposes only, this Celgene covered call aims for an annualized return rate of 15.1 %.

 

VMware (NYSE: VMW) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $87.12 while simultaneously selling the April $80.00 call will result in a new position with a target return of 8.2 %. Based on recent prices, this position will cost about $73.97, which is also the trade’s breakeven point. At that level, this covered call has 15.1 % downside protection, while still providing a 8.2 % return in 158 days as long as VMW is above $80.00 on 4/20/2013. For comparison purposes only, this VMware covered call aims for an annualized return rate of 18.8 %.

 

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