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Merck (NYSE: MRK) has been identified by InvestorsObserver analysts as being well-positioned for a new covered call today. Buying the stock for $45.19 while selling the April $46.00 call will produce a new covered call with a break-even point around $44.14. At that price, this position has a target return of 4.2 %. This trade will have roughly 2.3 % downside protection, while still aiming for a 4.2 % return in 129 days. It will lock in that return as long as Merck is above $46.00 on 4/20/2013. For comparison purposes only, this MRK covered call aims for an annualized return rate of 11.9 %.

Potash (NYSE: POT) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $40.90 while simultaneously selling the June $40.00 call will result in a new position with a target return of 6.5 %. Based on recent prices, this position will cost about $37.55, which is also the trade’s breakeven point. At that level, this covered call has 8.2 % downside protection, while still providing a 6.5 % return in 192 days as long as POT is above $40.00 on 6/22/2013. For comparison purposes only, this Potash covered call aims for an annualized return rate of 12.4 %.

Expedia (NASDAQ: EXPE) has been chosen by InvestorsObserver analysts as a candidate for a new covered call today. Selling the April $55.00 call while at the same time buying EXPE stock for $60.00 will produce a new covered call with a target return of 6.6 %. Based on recent data, this trade will cost about $51.60, which is also the covered call’s breakeven point. At that price, this covered call has 14.0 % downside protection, while seeking an assigned return of 6.6 % return in 129 days. If EXPE is higher than $55.00 on 4/20/2013, we are assured that simple return. For comparison purposes only, that equates to an annualized return rate of 18.6 %.

Melco PBL Entertainment Macau (NASDAQ: MPEL) has been selected by InvestorsObserver analysts as a stock that is a strong candidate for a new covered call today. Selling the April $15.00 call while simultaneously buying MPEL stock for $15.60 will result in a new position with a break-even point around $13.80. At that price, this position has a target return of 8.7 %. This trade has 11.5 % downside protection, while still providing a 8.7 % return in 129 days as long as MPEL is above $15.00 on 4/20/2013. For comparison purposes only, this Melco PBL Entertainment Macau covered call targets an annualized return rate of 24.6 %.

Netease.com (NASDAQ: NTES) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $38.00 while simultaneously selling the January $38.00 call will result in a new position with a target return of 5.1 %. Based on recent prices, this position will cost about $36.15, which is also the trade’s breakeven point. At that level, this covered call has 4.9 % downside protection, while still providing a 5.1 % return in 38 days as long as NTES is above $38.00 on 1/19/2013. For comparison purposes only, this Netease.com covered call aims for an annualized return rate of 49.1 %.

 

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