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Caterpillar (NYSE: CAT) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $86.64 while simultaneously selling the August $85.00 call will result in a new position with a target return of 4.6 %. Based on recent prices, this position will cost about $81.24, which is also the trade’s breakeven point. At that level, this covered call has 6.2 % downside protection, while still providing a 4.6 % return in 144 days as long as CAT is above $85.00 on 8/17/2013. For comparison purposes only, this Caterpillar covered call aims for an annualized return rate of 11.7 %.

Capital One (NYSE: COF) has been chosen by InvestorsObserver analysts as a candidate for a new covered call today. Selling the September $52.50 call while at the same time buying COF stock for $54.59 will produce a new covered call with a target return of 5.0 %. Based on recent data, this trade will cost about $49.99, which is also the covered call’s breakeven point. At that price, this covered call has 8.4 % downside protection, while seeking an assigned return of 5.0 % return in 179 days. If COF is higher than $52.50 on 9/21/2013, we are assured that simple return. For comparison purposes only, that equates to an annualized return rate of 10.2 %.

Groupon (NASDAQ: GRPN) has been selected by InvestorsObserver analysts as a stock that is a strong candidate for a new covered call today. Selling the October $6.00 call while simultaneously buying GRPN stock for $6.00 will result in a new position with a break-even point around $4.89. At that price, this position has a target return of 22.7 %. This trade has 18.5 % downside protection, while still providing a 22.7 % return in 207 days as long as GRPN is above $6.00 on 10/19/2013. For comparison purposes only, this Groupon covered call targets an annualized return rate of 40.0 %.

Tesla (NASDAQ: TSLA) has been identified by InvestorsObserver analysts as being well-positioned for a new covered call today. Buying the stock for $37.53 while selling the June $37.00 call will produce a new covered call with a break-even point around $35.13. At that price, this position has a target return of 5.3 %. This trade will have roughly 6.4 % downside protection, while still aiming for a 5.3 % return in 88 days. It will lock in that return as long as Tesla is above $37.00 on 6/22/2013. For comparison purposes only, this TSLA covered call aims for an annualized return rate of 22.1 %.

Cadence Design Systems (NASDAQ: CDNS) has been selected by InvestorsObserver analysts as a stock that is an ideal candidate for a new covered call today. Buying the stock for $13.64 while simultaneously selling the November $14.00 call will result in a new position with a target return of 10.8 %. Based on recent prices, this position will cost about $12.64, which is also the trade’s breakeven point. At that level, this covered call has 7.3 % downside protection, while still providing a 10.8 % return in 235 days as long as CDNS is above $14.00 on 11/16/2013. For comparison purposes only, this Cadence Design Systems covered call aims for an annualized return rate of 16.7 %.

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