MorningUpdate - Options Trading Email
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MORNING UPDATE: PriceWatch Alerts for CAT, LOW, DISH, and More...
May 11, 8:30 AM EST - Before the open... PriceWatch Alerts for CAT,
LOW, DISH, ZION, SOHU, IBM, MRO, CSX, PLL, and AMCX, Market
Overview, News Leaders and Laggards, Today's Economic Calendar, and
Index Support & Resistance Levels.
New PriceWatch Alerts for CAT, LOW, DISH, ZION, SOHU, IBM, MRO, CSX,
PLL, and AMCX
Caterpillar (NYSE: CAT) has been selected by InvestorsObserver analysts
as a stock that is a strong candidate for a new covered call today.
Selling the November $90.00 call while simultaneously buying CAT stock
for $95.44 will result in a new position with a break-even point around
$83.84. At that price, this position has a target return of 7.3 %. This
trade has 12.2 % downside protection, while still providing a 7.3 %
return in 190 days as long as CAT is above $90.00 on 11/17/2012. For
comparison purposes only, this Caterpillar covered call targets an
annualized return rate of 11.0 %.
Dish Network (NASDAQ: DISH) has been selected by InvestorsObserver
analysts as a stock that is an ideal candidate for a new covered call
today. Buying the stock for $30.81 while simultaneously selling the
September $29.00 call will result in a new position with a target return
of 7.0 %. Based on recent prices, this position will cost about $27.11,
which is also the trade�s breakeven point. At that level, this covered
call has 12.0 % downside protection, while still providing a 7.0 %
return in 134 days as long as DISH is above $29.00 on 9/22/2012. For
comparison purposes only, this Dish Network covered call aims for an
annualized return rate of 18.3 %.
Lowe's (NYSE: LOW) has been chosen by InvestorsObserver analysts as a
candidate for a new covered call today. Selling the October $29.00 call
while at the same time buying LOW stock for $30.18 will produce a new
covered call with a target return of 5.5 %. Based on recent data, this
trade will cost about $27.48, 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 5.5 % return in 162 days. If LOW is
higher than $29.00 on 10/20/2012, we are assured that simple return. For
comparison purposes only, that equates to an annualized return rate of
11.0 %.
Sohu com (NASDAQ: SOHU) has been identified by InvestorsObserver
analysts as being well-positioned for a new covered call today. Buying
the stock for $46.09 while selling the September $40.00 call will
produce a new covered call with a break-even point around $37.24. At
that price, this position has a target return of 7.4 %. This trade will
have roughly 19.2 % downside protection, while still aiming for a 7.4 %
return in 134 days. It will lock in that return as long as Sohu com is
above $40.00 on 9/22/2012. For comparison purposes only, this SOHU
covered call aims for an annualized return rate of 18.3 %.
Zions Bancorporation (NASDAQ: ZION) has been selected by
InvestorsObserver analysts as a stock that is an ideal candidate for a
new covered call today. Buying the stock for $19.89 while simultaneously
selling the October $18.00 call will result in a new position with a
target return of 6.9 %. Based on recent prices, this position will cost
about $16.84, which is also the trade�s breakeven point. At that level,
this covered call has 15.3 % downside protection, while still providing
a 6.9 % return in 162 days as long as ZION is above $18.00 on
10/20/2012. For comparison purposes only, this Zions Bancorporation
covered call aims for an annualized return rate of 14.6 %.
(NASDAQ: AMCX) has been selected by InvestorsObserver analysts as a
stock that is a strong candidate for a new covered call today. Selling
the September $40.00 call while simultaneously buying AMCX stock for
$40.50 will result in a new position with a break-even point around
$36.70. At that price, this position has a target return of 9.0 %. This
trade has 9.4 % downside protection, while still providing a 9.0 %
return in 134 days as long as AMCX is above $40.00 on 9/22/2012. For
comparison purposes only, this covered call targets an annualized return
rate of 21.9 %.
CSX (NYSE: CSX) has been identified by InvestorsObserver analysts as
being well-positioned for a new covered call today. Buying the stock for
$21.68 while selling the November $20.00 call will produce a new covered
call with a break-even point around $18.93. At that price, this position
has a target return of 5.7 %. This trade will have roughly 12.7 %
downside protection, while still aiming for a 5.7 % return in 190 days.
It will lock in that return as long as CSX is above $20.00 on
11/17/2012. For comparison purposes only, this CSX covered call aims for
an annualized return rate of 7.3 %.
International Business Machines (NYSE: IBM) has been chosen by
InvestorsObserver analysts as a candidate for a new covered call today.
Selling the October $200.00 call while at the same time buying IBM stock
for $200.60 will produce a new covered call with a target return of 5.3
%. Based on recent data, this trade will cost about $190.00, which is
also the covered call�s breakeven point. At that price, this covered
call has 5.3 % downside protection, while seeking an assigned return of
5.3 % return in 162 days. If IBM is higher than $200.00 on 10/20/2012,
we are assured that simple return. For comparison purposes only, that
equates to an annualized return rate of 11.0 %.
Marathon Oil (NYSE: MRO) has been selected by InvestorsObserver analysts
as a stock that is an ideal candidate for a new covered call today.
Buying the stock for $26.98 while simultaneously selling the October
$25.00 call will result in a new position with a target return of 5.6 %.
Based on recent prices, this position will cost about $23.68, which is
also the trade�s breakeven point. At that level, this covered call has
12.2 % downside protection, while still providing a 5.6 % return in 162
days as long as MRO is above $25.00 on 10/20/2012. For comparison
purposes only, this Marathon Oil covered call aims for an annualized
return rate of 11.0 %.
Pall (NYSE: PLL) has been selected by InvestorsObserver analysts as a
stock that is an ideal candidate for a new covered call today. Buying
the stock for $57.91 while simultaneously selling the September $55.00
call will result in a new position with a target return of 5.0 %. Based
on recent prices, this position will cost about $52.36, which is also
the trade�s breakeven point. At that level, this covered call has 9.6 %
downside protection, while still providing a 5.0 % return in 134 days as
long as PLL is above $55.00 on 9/22/2012. For comparison purposes only,
this Pall covered call aims for an annualized return rate of 11.0 %.
*For more details on these covered calls and how you can use them to
enhance your portfolio performance, go to:
http://www.****/io/learningcenter#CoveredCall
NOTE: All stocks and options shown are examples only. These are not
recommendations to buy or sell any security.
NEWS LEADERS AND LAGGARDS-----------------------------------------
Stocks pointed higher this morning include NVIDIA (NVDA), Gilead
Sciences (GILD) and Bed Bath and Beyond (BBBY). Pointed lower this
morning are JP Morgan (JPM), Nordstrom (JWN) and Citigroup �. Analyst
upgrades this morning include Bed Bay and Beyond (BBBY), Sun Life
Financial (SLF) and AT&T (T). Downgrades this morning include Roundy�s
(RNDY), PSS World Med (PSSI) and JP Morgan Chase (JPM).
MARKET OVERVIEW---------------------------------------------------
Stocks in Asia ended lower today, as news of a massive $2-billion
trading loss at JPMorgan Chase sparked global jitters. Downbeat data out
of Beijing also weighed on investor sentiment, as factory output and
retail sales both rose at a relatively sluggish pace in April.
Meanwhile, tech stocks suffered on the heels of a cautious outlook from
Cisco Systems and a poorly received earnings report from Sony. By the
close, South Korea's Kospi fell 1.4% and Hong Kong's Hang Seng lost
1.3%, while China's Shanghai Composite and Japan's Nikkei dropped 0.6%
apiece.
European markets are also bathed in red at midday, although strength in
energy stocks has helped to pull the major regional benchmarks off their
session lows. While weak Chinese data and JPMorgan's surprise loss
announcement prompted early selling pressure, Royal Dutch Shell is on
the upswing following reports that Qatar's sovereign wealth fund is
looking to take a stake in the oil major. At last look, London's FTSE
100 is off 0.4%, the German DAX is down 0.3 %, and the French CAC 40 is
1% lower.
The U.S. dollar index is slightly higher this morning, with the
greenback trading near $80.23. After yesterday's modest gain, crude oil
can't keep the positivity going and crude for June delivery down nearly
1% at $96.47 per barrel. Gold futures are taking a similar path, with
the malleable metal 0.8% lower at $1,582.80 an ounce.
PUT/CALL RATIO ---------------------------------------------------
Equity option activity on the Chicago Board Options Exchange (CBOE) saw
1,083,521 call contracts traded on Thursday, compared to 749,311 put
contracts. The resultant single-session put/call ratio arrived at 0.69,
while the 21-day moving average was 0.67.
SUPPORT & RESISTANCE LEVELS --------------------------------------
The S&P Depository Receipts (SPY) show support in the neighborhood of
$134.49 with resistance near $140.46. The Nasdaq 100 (QQQ) has shown
support around $63.48 and resistance around $65.07.
TODAY'S ECONOMIC CALENDAR ----------------------------------------
8:30 a.m. April PPI
8:30 a.m. April Core PPI
9:55 a.m. May Mich. Sentiment
EARNINGS EXPECTED TODAY ------------------------------------------
NVDA
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