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Visa (NYSE: V) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $152.46 while simultaneously selling the June $150.00 call will result in a new position with a target return of 5.7 %. Based on recent prices, this position will cost about $141.86, which is also the trade’s breakeven point. At that level, this covered call has 7.0 % downside protection, while still providing a 5.7 % return in 183 days as long as V is above $150.00 on 6/22/2013. For comparison purposes only, this Visa covered call aims for an annualized return rate of 11.4 %.

Chesapeake Energy (NYSE: CHK) has been identified by InvestorsObserver analysts as being well-positioned for a new covered call today. Buying the stock for $17.58 while selling the April $17.00 call will produce a new covered call with a break-even point around $15.79. At that price, this position has a target return of 7.7 %. This trade will have roughly 10.2 % downside protection, while still aiming for a 7.7 % return in 120 days. It will lock in that return as long as Chesapeake Energy is above $17.00 on 4/20/2013. For comparison purposes only, this CHK covered call aims for an annualized return rate of 23.3 %.

CarMax Group (NYSE: KMX) has been chosen by InvestorsObserver analysts as a candidate for a new covered call today. Selling the April $37.00 call while at the same time buying KMX stock for $37.97 will produce a new covered call with a target return of 6.1 %. Based on recent data, this trade will cost about $34.87, which is also the covered call’s breakeven point. At that price, this covered call has 8.2 % downside protection, while seeking an assigned return of 6.1 % return in 120 days. If KMX is higher than $37.00 on 4/20/2013, we are assured that simple return. For comparison purposes only, that equates to an annualized return rate of 18.6 %.

Sherwin Williams (NYSE: SHW) has been selected by InvestorsObserver analysts as a stock that is a strong candidate for a new covered call today. Selling the June $150.00 call while simultaneously buying SHW stock for $152.42 will result in a new position with a break-even point around $143.72. At that price, this position has a target return of 4.4 %. This trade has 5.7 % downside protection, while still providing a 4.4 % return in 177 days as long as SHW is above $150.00 on 6/16/2013. For comparison purposes only, this Sherwin Williams covered call targets an annualized return rate of 9.0 %.

VirnetX (AMEX: VHC) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $33.00 while simultaneously selling the January $32.00 call will result in a new position with a target return of 8.8 %. Based on recent prices, this position will cost about $29.40, which is also the trade’s breakeven point. At that level, this covered call has 10.9 % downside protection, while still providing a 8.8 % return in 29 days as long as VHC is above $32.00 on 1/19/2013. For comparison purposes only, this VirnetX covered call aims for an annualized return rate of 111.3 %.

 

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