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Bank of America (NYSE: BAC) has been identified by InvestorsObserver analysts as being well-positioned for a new covered call today. Buying the stock for $9.91 while selling the August $10.00 call will produce a new covered call with a break-even point around $8.81. At that price, this position has a target return of 13.5 %. This trade will have roughly 11.1 % downside protection, while still aiming for a 13.5 % return in 255 days. It will lock in that return as long as Bank of America is above $10.00 on 8/17/2013. For comparison purposes only, this BAC covered call aims for an annualized return rate of 19.3 %.

Applied Materials (NASDAQ: AMAT) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $10.88 while simultaneously selling the July $11.00 call will result in a new position with a target return of 9.1 %. Based on recent prices, this position will cost about $10.08, which is also the trade’s breakeven point. At that level, this covered call has 7.4 % downside protection, while still providing a 9.1 % return in 227 days as long as AMAT is above $11.00 on 7/20/2013. For comparison purposes only, this Applied Materials covered call aims for an annualized return rate of 14.7 %.

Big Lots (NYSE: BIG) has been chosen by InvestorsObserver analysts as a candidate for a new covered call today. Selling the April $30.00 call while at the same time buying BIG stock for $31.27 will produce a new covered call with a target return of 6.9 %. Based on recent data, this trade will cost about $28.07, which is also the covered call’s breakeven point. At that price, this covered call has 10.2 % downside protection, while seeking an assigned return of 6.9 % return in 136 days. If BIG is higher than $30.00 on 4/20/2013, we are assured that simple return. For comparison purposes only, that equates to an annualized return rate of 18.4 %.

Skyworks Solutions (NASDAQ: SWKS) has been selected by InvestorsObserver analysts as a stock that is a strong candidate for a new covered call today. Selling the February $23.00 call while simultaneously buying SWKS stock for $23.17 will result in a new position with a break-even point around $21.22. At that price, this position has a target return of 8.4 %. This trade has 8.4 % downside protection, while still providing a 8.4 % return in 73 days as long as SWKS is above $23.00 on 2/16/2013. For comparison purposes only, this Skyworks Solutions covered call targets an annualized return rate of 41.9 %.

Smith and Wesson (NASDAQ: SWHC) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $10.66 while simultaneously selling the June $10.00 call will result in a new position with a target return of 15.5 %. Based on recent prices, this position will cost about $8.66, which is also the trade’s breakeven point. At that level, this covered call has 18.8 % downside protection, while still providing a 15.5 % return in 199 days as long as SWHC is above $10.00 on 6/22/2013. For comparison purposes only, this Smith and Wesson covered call aims for an annualized return rate of 28.4 %.

 

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