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McDonald's (NYSE: MCD) has been identified by InvestorsObserver analysts as being well-positioned for a new covered call today. Buying the stock for $86.97 while selling the June $87.50 call will produce a new covered call with a break-even point around $83.72. At that price, this position has a target return of 4.5 %. This trade will have roughly 3.7 % downside protection, while still aiming for a 4.5 % return in 198 days. It will lock in that return as long as McDonald's is above $87.50 on 6/22/2013. For comparison purposes only, this MCD covered call aims for an annualized return rate of 8.3 %.

Travelers (NYSE: TRV) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $74.00 while simultaneously selling the April $75.00 call will result in a new position with a target return of 4.4 %. Based on recent prices, this position will cost about $71.85, which is also the trade’s breakeven point. At that level, this covered call has 2.9 % downside protection, while still providing a 4.4 % return in 135 days as long as TRV is above $75.00 on 4/20/2013. For comparison purposes only, this Travelers covered call aims for an annualized return rate of 11.8 %.

Plains Exploration and Production (NYSE: PXP) has been chosen by InvestorsObserver analysts as a candidate for a new covered call today. Selling the May $44.00 call while at the same time buying PXP stock for $44.50 will produce a new covered call with a target return of 4.9 %. Based on recent data, this trade will cost about $41.93, which is also the covered call’s breakeven point. At that price, this covered call has 5.8 % downside protection, while seeking an assigned return of 4.9 % return in 163 days. If PXP is higher than $44.00 on 5/18/2013, we are assured that simple return. For comparison purposes only, that equates to an annualized return rate of 11.0 %.

Cobalt International Energy (NYSE: CIE) has been selected by InvestorsObserver analysts as a stock that is a strong candidate for a new covered call today. Selling the January $27.50 call while simultaneously buying CIE stock for $28.21 will result in a new position with a break-even point around $26.16. At that price, this position has a target return of 5.1 %. This trade has 7.3 % downside protection, while still providing a 5.1 % return in 44 days as long as CIE is above $27.50 on 1/19/2013. For comparison purposes only, this Cobalt International Energy covered call targets an annualized return rate of 42.5 %.

Discovery (NASDAQ: DISCA) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $61.74 while simultaneously selling the April $60.00 call will result in a new position with a target return of 4.5 %. Based on recent prices, this position will cost about $57.44, which is also the trade’s breakeven point. At that level, this covered call has 7.0 % downside protection, while still providing a 4.5 % return in 135 days as long as DISCA is above $60.00 on 4/20/2013. For comparison purposes only, this Discovery covered call aims for an annualized return rate of 12.0 %.

 

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