MorningUpdate - Options Trading Email
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MORNING UPDATE: PriceWatch Alerts for GE, X, BTU, and More...
May 17, 8:30 AM EST - Before the open... PriceWatch Alerts for GE,
STX, CHS, TTM, LVLT, X, BTU, WSM, AUY, and BWLD, Market Overview,
News Leaders and Laggards, Today's Economic Calendar, and Index
Support & Resistance Levels.
New PriceWatch Alerts for GE, STX, CHS, TTM, LVLT, X, BTU, WSM,
AUY, and BWLD
Chicos FAS (NYSE: CHS) has been selected by InvestorsObserver
analysts as a stock that is an ideal candidate for a new covered
call today. Buying the stock for $15.21 while simultaneously
selling the August $15.00 call will result in a new position with a
target return of 7.8%. Based on recent prices, this position will
cost about $13.91, which is also the trade's breakeven point. At
that level, this covered call has 8.5% downside protection, while
still providing a 7.8% return in 93 days as long as CHS is above
$15.00 on 8/18/2012. For comparison purposes only, this Chicos FAS
covered call aims for an annualized return rate of 29.2%.
General Electric (NYSE: GE) has been identified by
InvestorsObserver analysts as being well-positioned for a new
covered call today. Buying the stock for $19.00 while selling the
September $19.00 call will produce a new covered call with a break-
even point around $17.94. At that price, this position has a target
return of 5.9%. This trade will have roughly 5.6% downside
protection, while still aiming for a 5.9% return in 128 days. It
will lock in that return as long as General Electric is above
$19.00 on 9/22/2012. For comparison purposes only, this GE covered
call aims for an annualized return rate of 14.6%.
Level 3 Communications (NASDAQ: LVLT) has been selected by
InvestorsObserver analysts as a stock that is a strong candidate
for a new covered call today. Selling the September $22.00 call
while simultaneously buying LVLT stock for $22.92 will result in a
new position with a break-even point around $19.62. At that price,
this position has a target return of 12.1%. This trade has 14.4%
downside protection, while still providing a 12.1% return in 128
days as long as LVLT is above $22.00 on 9/22/2012. For comparison
purposes only, this Level 3 Communications covered call targets an
annualized return rate of 32.9%.
Seagate Technology (NASDAQ: STX) has been selected by
InvestorsObserver analysts as a stock that is an ideal candidate
for a new covered call today. Buying the stock for $30.24 while
simultaneously selling the June $30.00 call will result in a new
position with a target return of 5.6%. Based on recent prices, this
position will cost about $28.40, which is also the trade's
breakeven point. At that level, this covered call has 6.1% downside
protection, while still providing a 5.6% return in 30 days as long
as STX is above $30.00 on 6/16/2012. For comparison purposes only,
this Seagate Technology covered call aims for an annualized return
rate of 65.7%.
Tata Motors (NYSE: TTM) has been chosen by InvestorsObserver
analysts as a candidate for a new covered call today. Selling the
June $24.00 call while at the same time buying TTM stock for $24.38
will produce a new covered call with a target return of 4.9%. Based
on recent data, this trade will cost about $22.88, which is also
the covered call's breakeven point. At that price, this covered
call has 6.2% downside protection, while seeking an assigned return
of 4.9% return in 30 days. If TTM is higher than $24.00 on
6/16/2012, we are assured that simple return. For comparison
purposes only, that equates to an annualized return rate of 58.4%.
Yamana Gold (NYSE: AUY) has been chosen by InvestorsObserver
analysts as a candidate for a new covered call today. Selling the
October $13.00 call while at the same time buying AUY stock for
$13.01 will produce a new covered call with a target return of
12.7%. Based on recent data, this trade will cost about $11.54,
which is also the covered call's breakeven point. At that price,
this covered call has 11.3% downside protection, while seeking an
assigned return of 12.7% return in 156 days. If AUY is higher than
$13.00 on 10/20/2012, we are assured that simple return. For
comparison purposes only, that equates to an annualized return rate
of 29.2%.
Peabody Energy (NYSE: BTU) has been selected by InvestorsObserver
analysts as a stock that is an ideal candidate for a new covered
call today. Buying the stock for $25.24 while simultaneously
selling the June $25.00 call will result in a new position with a
target return of 6.8%. Based on recent prices, this position will
cost about $23.40, which is also the trade's breakeven point. At
that level, this covered call has 7.3% downside protection, while
still providing a 6.8% return in 30 days as long as BTU is above
$25.00 on 6/16/2012. For comparison purposes only, this Peabody
Energy covered call aims for an annualized return rate of 80.3%.
Buffalo Wild Wings (NASDAQ: BWLD) has been selected by
InvestorsObserver analysts as a stock that is a strong candidate
for a new covered call today. Selling the September $85.00 call
while simultaneously buying BWLD stock for $88.38 will result in a
new position with a break-even point around $78.38. At that price,
this position has a target return of 8.4%. This trade has 11.3%
downside protection, while still providing a 8.4% return in 128
days as long as BWLD is above $85.00 on 9/22/2012. For comparison
purposes only, this Buffalo Wild Wings covered call targets an
annualized return rate of 21.9%.
Williams Sonoma (NYSE: WSM) has been selected by InvestorsObserver
analysts as a stock that is an ideal candidate for a new covered
call today. Buying the stock for $36.20 while simultaneously
selling the June $36.00 call will result in a new position with a
target return of 4.3%. Based on recent prices, this position will
cost about $34.50, which is also the trade's breakeven point. At
that level, this covered call has 4.7% downside protection, while
still providing a 4.3% return in 30 days as long as WSM is above
$36.00 on 6/16/2012. For comparison purposes only, this Williams
Sonoma covered call aims for an annualized return rate of 51.1%.
US Steel (NYSE: X) has been identified by InvestorsObserver
analysts as being well-positioned for a new covered call today.
Buying the stock for $22.76 while selling the June $22.00 call will
produce a new covered call with a break-even point around $20.75.
At that price, this position has a target return of 6.0%. This
trade will have roughly 8.8% downside protection, while still
aiming for a 6.0% return in 30 days. It will lock in that return as
long as US Steel is above $22.00 on 6/16/2012. For comparison
purposes only, this X covered call aims for an annualized return
rate of 73.0%.
*Annualized returns are shown for comparison purposes
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NOTE: All stocks and options shown are examples only. These are not
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NEWS LEADERS AND LAGGARDS-----------------------------------------
Stocks pointed higher in premarket this morning include Agilent
Technologies (A), Wal-Mart Stores (WMT) and Electronic Arts (EA).
Pointed lower this morning are Dollar Tree (DLTR), Limited Brands
(LTD) and JPMorgan Chase (JPM). Analyst upgrades so far today
include Herbalife (HLF), Citi Trends (CITI) and Dell (DELL).
Downgrades today include Riverbed Technology (RVBD), Abercrombie &
Fitch (ANF) and Cintas Corp. (CTAS).
MARKET OVERVIEW---------------------------------------------------
Stocks in Asia ended mostly higher today, despite reports that the
European Central Bank (ECB) has stopped offering liquidity to
several undercapitalized Greek banks. Instead, traders focused on
data showing that Japan's economy expanded by a stronger-than-
forecast 1% during the first quarter, which helped equities recover
from the previous session's steep losses. By the close, China's
Shanghai Composite advanced 1.4%, Japan's Nikkei tacked on 0.9%,
South Korea's Kospi rose 0.3%, and Hong Kong's Hang Seng fell 0.3%.
On the other hand, the major European indexes are firmly in the red
at midday. A report on gross domestic product (GDP) showed Spain's
economy shrinking during the first quarter, and yields on the
country's 10-year notes jumped north of 6% during a debt auction.
Meanwhile, shares of newly nationalized lender Bankia plummeted
amid news of massive customer withdrawals. At last look, both the
London FTSE 100 and the French CAC 40 are down 1.5%, while the
German DAX has declined 1.3%.
The U.S. dollar index is pointed north this morning, with the
greenback 0.2% higher at $81.54. Crude oil is churning around
breakeven, with crude for June delivery last seen at $93.20 per
barrel. After closing at their lowest level in 10 months, gold
futures are on the rebound, with the malleable metal up 0.7% at
$1,546.60 an ounce.
PUT/CALL RATIO ---------------------------------------------------
Equity option activity on the Chicago Board Options Exchange (CBOE)
saw 1,185,196 call contracts traded on Wednesday, compared to
1,052,281 put contracts. The resultant single-session put/call
ratio arrived at 0.89, while the 21-day moving average was 0.73.
SUPPORT & RESISTANCE LEVELS --------------------------------------
The S&P Depository Receipts (SPY) show support in the neighborhood
of $132.15 with resistance near $135.60. The Nasdaq 100 (QQQ) has
shown support around $63.60 and resistance around $64.85.
TODAY'S ECONOMIC CALENDAR ----------------------------------------
8:30 a.m. 5/12 Initial Claims
8:30 a.m. 5/5 Continuing Claims
10:00 a.m. May Philadelphia Fed
10:00 a.m. April Leading Indicators
EARNINGS EXPECTED TODAY ------------------------------------------
AMAT
ADSK
CSC
DLTR
GME
GPS
INTU
PCP
ROST
CRM
WMT
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