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Wells Fargo (NYSE: WFC) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $35.05 while simultaneously selling the April $35.00 call will result in a new position with a target return of 4.5 %. Based on recent prices, this position will cost about $33.49, which is also the trade’s breakeven point. At that level, this covered call has 4.5 % downside protection, while still providing a 4.5 % return in 107 days as long as WFC is above $35.00 on 4/20/2013. For comparison purposes only, this Wells Fargo covered call aims for an annualized return rate of 15.4 %.

JC Penney (NYSE: JCP) has been chosen by InvestorsObserver analysts as a candidate for a new covered call today. Selling the February $20.00 call while at the same time buying JCP stock for $20.84 will produce a new covered call with a target return of 7.9 %. Based on recent data, this trade will cost about $18.54, which is also the covered call’s breakeven point. At that price, this covered call has 11.0 % downside protection, while seeking an assigned return of 7.9 % return in 44 days. If JCP is higher than $20.00 on 2/16/2013, we are assured that simple return. For comparison purposes only, that equates to an annualized return rate of 65.3 %.

Lam Research (NASDAQ: LRCX) has been selected by InvestorsObserver analysts as a stock that is a strong candidate for a new covered call today. Selling the March $38.00 call while simultaneously buying LRCX stock for $38.73 will result in a new position with a break-even point around $36.43. At that price, this position has a target return of 4.3 %. This trade has 5.9 % downside protection, while still providing a 4.3 % return in 72 days as long as LRCX is above $38.00 on 3/16/2013. For comparison purposes only, this Lam Research covered call targets an annualized return rate of 21.8 %.

Bill Barrett (NYSE: BBG) has been identified by InvestorsObserver analysts as being well-positioned for a new covered call today. Buying the stock for $18.58 while selling the March $17.50 call will produce a new covered call with a break-even point around $16.48. At that price, this position has a target return of 6.2 %. This trade will have roughly 11.3 % downside protection, while still aiming for a 6.2 % return in 72 days. It will lock in that return as long as Bill Barrett is above $17.50 on 3/16/2013. For comparison purposes only, this BBG covered call aims for an annualized return rate of 31.3 %.

Krispy Kreme Doughnuts (NYSE: KKD) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $9.75 while simultaneously selling the August $10.00 call will result in a new position with a target return of 14.3 %. Based on recent prices, this position will cost about $8.75, which is also the trade’s breakeven point. At that level, this covered call has 10.3 % downside protection, while still providing a 14.3 % return in 226 days as long as KKD is above $10.00 on 8/17/2013. For comparison purposes only, this Krispy Kreme Doughnuts covered call aims for an annualized return rate of 23.1 %.

 

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