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Merck (NYSE: MRK) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $42.82 while simultaneously selling the July $44.00 call will result in a new position with a target return of 5.3 %. Based on recent prices, this position will cost about $41.77, which is also the trade’s breakeven point. At that level, this covered call has 2.5 % downside protection, while still providing a 5.3 % return in 177 days as long as MRK is above $44.00 on 7/20/2013. For comparison purposes only, this Merck covered call aims for an annualized return rate of 11.0 %.

Eli Lilly (NYSE: LLY) has been identified by InvestorsObserver analysts as being well-positioned for a new covered call today. Buying the stock for $52.40 while selling the July $52.50 call will produce a new covered call with a break-even point around $50.41. At that price, this position has a target return of 4.1 %. This trade will have roughly 3.8 % downside protection, while still aiming for a 4.1 % return in 177 days. It will lock in that return as long as Eli Lilly is above $52.50 on 7/20/2013. For comparison purposes only, this LLY covered call aims for an annualized return rate of 8.5 %.

Symantec (NASDAQ: SYMC) has been chosen by InvestorsObserver analysts as a candidate for a new covered call today. Selling the July $21.00 call while at the same time buying SYMC stock for $21.46 will produce a new covered call with a target return of 7.4 %. Based on recent data, this trade will cost about $19.55, which is also the covered call’s breakeven point. At that price, this covered call has 8.9 % downside protection, while seeking an assigned return of 7.4 % return in 177 days. If SYMC is higher than $21.00 on 7/20/2013, we are assured that simple return. For comparison purposes only, that equates to an annualized return rate of 15.3 %.

D R Horton (NYSE: DHI) has been selected by InvestorsObserver analysts as a stock that is a strong candidate for a new covered call today. Selling the May $21.00 call while simultaneously buying DHI stock for $21.82 will result in a new position with a break-even point around $19.86. At that price, this position has a target return of 5.7 %. This trade has 9.0 % downside protection, while still providing a 5.7 % return in 114 days as long as DHI is above $21.00 on 5/18/2013. For comparison purposes only, this D R Horton covered call targets an annualized return rate of 18.4 %.

Tesla (NASDAQ: TSLA) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $36.00 while simultaneously selling the March $36.00 call will result in a new position with a target return of 5.4 %. Based on recent prices, this position will cost about $34.15, which is also the trade’s breakeven point. At that level, this covered call has 5.1 % downside protection, while still providing a 5.4 % return in 51 days as long as TSLA is above $36.00 on 3/16/2013. For comparison purposes only, this Tesla covered call aims for an annualized return rate of 38.7 %.

 

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