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American International Group (NYSE: AIG) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $35.54 while simultaneously selling the May $35.00 call will result in a new position with a target return of 6.1 %. Based on recent prices, this position will cost about $32.99, which is also the trade’s breakeven point. At that level, this covered call has 7.2 % downside protection, while still providing a 6.1 % return in 121 days as long as AIG is above $35.00 on 5/18/2013. For comparison purposes only, this American International Group covered call aims for an annualized return rate of 18.4 %.

Delta Air Lines (NYSE: DAL) has been chosen by InvestorsObserver analysts as a candidate for a new covered call today. Selling the June $14.00 call while at the same time buying DAL stock for $13.92 will produce a new covered call with a target return of 11.2 %. Based on recent data, this trade will cost about $12.59, which is also the covered call’s breakeven point. At that price, this covered call has 9.6 % downside protection, while seeking an assigned return of 11.2 % return in 156 days. If DAL is higher than $14.00 on 6/22/2013, we are assured that simple return. For comparison purposes only, that equates to an annualized return rate of 26.2 %.

Phillips 66 (NYSE: PSX) has been selected by InvestorsObserver analysts as a stock that is a strong candidate for a new covered call today. Selling the May $55.00 call while simultaneously buying PSX stock for $54.52 will result in a new position with a break-even point around $51.02. At that price, this position has a target return of 7.8 %. This trade has 6.4 % downside protection, while still providing a 7.8 % return in 121 days as long as PSX is above $55.00 on 5/18/2013. For comparison purposes only, this Phillips 66 covered call targets an annualized return rate of 23.5 %.

Molycorp (NYSE: MCP) has been identified by InvestorsObserver analysts as being well-positioned for a new covered call today. Buying the stock for $9.04 while selling the March $9.00 call will produce a new covered call with a break-even point around $7.98. At that price, this position has a target return of 12.8 %. This trade will have roughly 11.7 % downside protection, while still aiming for a 12.8 % return in 58 days. It will lock in that return as long as Molycorp is above $9.00 on 3/16/2013. For comparison purposes only, this MCP covered call aims for an annualized return rate of 80.4 %.

Cadence Design Systems (NASDAQ: CDNS) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $14.13 while simultaneously selling the August $14.00 call will result in a new position with a target return of 8.7 %. Based on recent prices, this position will cost about $12.88, which is also the trade’s breakeven point. At that level, this covered call has 8.8 % downside protection, while still providing a 8.7 % return in 212 days as long as CDNS is above $14.00 on 8/17/2013. For comparison purposes only, this Cadence Design Systems covered call aims for an annualized return rate of 15.0 %.

 

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