MorningUpdate - Options Trading Email
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MORNING UPDATE: PriceWatch Alerts for IBM, QCOM, X, and More...
June 19, 8:30 AM ET - Before the open... PriceWatch Alerts for IBM,
OXY, DB, IAG, TSLA, BIDU, APA, NSC, LCC, HLF, QCOM, X, EOG, ALGN,
and FIO, Market Overview, News Leaders and Laggards, Today's
Economic Calendar, and Index Support & Resistance Levels.
PriceWatch Alerts for IBM, OXY, DB, IAG, TSLA, BIDU, APA, NSC, LCC,
HLF, QCOM, X, EOG, ALGN, and FIO
Deutsche Bank (NYSE: DB) has been selected by InvestorsObserver
analysts as a stock that is an ideal candidate for a new covered
call today. Buying the stock for $35.32 while simultaneously
selling the August $35.00 call will result in a new position with a
target return of 8.3%. Based on recent prices, this position will
cost about $32.32, which is also the trade's breakeven point. At
that level, this covered call has 8.5% downside protection, while
still providing a 8.3% return in 60 days as long as DB is above
$35.00 on 8/18/2012. For comparison purposes only, this Deutsche
Bank covered call aims for an annualized return rate of 47.5%.
Iamgold (NYSE: IAG) has been chosen by InvestorsObserver analysts
as a candidate for a new covered call today. Selling the December
$12.00 call while at the same time buying IAG stock for $12.84 will
produce a new covered call with a target return of 10.7%. Based on
recent data, this trade will cost about $10.84, which is also the
covered call's breakeven point. At that price, this covered call
has 15.6% downside protection, while seeking an assigned return of
10.7% return in 186 days. If IAG is higher than $12.00 on
12/22/2012, we are assured that simple return. For comparison
purposes only, that equates to an annualized return rate of 18.3%.
International Business Machines (NYSE: IBM) has been identified by
InvestorsObserver analysts as being well-positioned for a new
covered call today. Buying the stock for $198.29 while selling the
January $195.00 call will produce a new covered call with a break-
even point around $184.19. At that price, this position has a
target return of 5.9%. This trade will have roughly 7.1% downside
protection, while still aiming for a 5.9% return in 214 days. It
will lock in that return as long as International Business Machines
is above $195.00 on 1/19/2013. For comparison purposes only, this
IBM covered call aims for an annualized return rate of 7.3%.
Occidental Petroleum (NYSE: OXY) has been selected by
InvestorsObserver analysts as a stock that is an ideal candidate
for a new covered call today. Buying the stock for $83.81 while
simultaneously selling the August $82.50 call will result in a new
position with a target return of 4.4%. Based on recent prices, this
position will cost about $79.06, which is also the trade's
breakeven point. At that level, this covered call has 5.7% downside
protection, while still providing a 4.4% return in 60 days as long
as OXY is above $82.50 on 8/18/2012. For comparison purposes only,
this Occidental Petroleum covered call aims for an annualized
return rate of 25.6%.
Tesla (NASDAQ: TSLA) has been selected by InvestorsObserver
analysts as a stock that is a strong candidate for a new covered
call today. Selling the August $31.00 call while simultaneously
buying TSLA stock for $31.84 will result in a new position with a
break-even point around $28.84. At that price, this position has a
target return of 7.5%. This trade has 9.4% downside protection,
while still providing a 7.5% return in 60 days as long as TSLA is
above $31.00 on 8/18/2012. For comparison purposes only, this Tesla
covered call targets an annualized return rate of 43.8%.
Apache (NYSE: APA) has been selected by InvestorsObserver analysts
as a stock that is an ideal candidate for a new covered call today.
Buying the stock for $85.37 while simultaneously selling the August
$85.00 call will result in a new position with a target return of
5.2%. Based on recent prices, this position will cost about $80.82,
which is also the trade's breakeven point. At that level, this
covered call has 5.3% downside protection, while still providing a
5.2% return in 60 days as long as APA is above $85.00 on 8/18/2012.
For comparison purposes only, this Apache covered call aims for an
annualized return rate of 29.2%.
Baidu.com (NASDAQ: BIDU) has been identified by InvestorsObserver
analysts as being well-positioned for a new covered call today.
Buying the stock for $121.37 while selling the August $120.00 call
will produce a new covered call with a break-even point around
$112.52. At that price, this position has a target return of 6.6%.
This trade will have roughly 7.3% downside protection, while still
aiming for a 6.6% return in 60 days. It will lock in that return as
long as Baidu.com is above $120.00 on 8/18/2012. For comparison
purposes only, this BIDU covered call aims for an annualized return
rate of 40.2%.
Herbalife (NYSE: HLF) has been selected by InvestorsObserver
analysts as a stock that is a strong candidate for a new covered
call today. Selling the August $45.00 call while simultaneously
buying HLF stock for $47.00 will result in a new position with a
break-even point around $42.10. At that price, this position has a
target return of 6.9%. This trade has 10.4% downside protection,
while still providing a 6.9% return in 60 days as long as HLF is
above $45.00 on 8/18/2012. For comparison purposes only, this
Herbalife covered call targets an annualized return rate of 40.2%.
US Airways (NYSE: LCC) has been chosen by InvestorsObserver
analysts as a candidate for a new covered call today. Selling the
September $12.00 call while at the same time buying LCC stock for
$12.50 will produce a new covered call with a target return of
14.3%. Based on recent data, this trade will cost about $10.50,
which is also the covered call's breakeven point. At that price,
this covered call has 16.0% downside protection, while seeking an
assigned return of 14.3% return in 95 days. If LCC is higher than
$12.00 on 9/22/2012, we are assured that simple return. For
comparison purposes only, that equates to an annualized return rate
of 54.8%.
Norfolk Southern (NYSE: NSC) has been selected by InvestorsObserver
analysts as a stock that is an ideal candidate for a new covered
call today. Buying the stock for $71.07 while simultaneously
selling the September $70.00 call will result in a new position
with a target return of 4.1%. Based on recent prices, this position
will cost about $67.27, which is also the trade's breakeven point.
At that level, this covered call has 5.3% downside protection,
while still providing a 4.1% return in 95 days as long as NSC is
above $70.00 on 9/22/2012. For comparison purposes only, this
Norfolk Southern covered call aims for an annualized return rate of
14.6%.
Align Technology (NASDAQ: ALGN) has been chosen by
InvestorsObserver analysts as a candidate for a new covered call
today. Selling the August $33.00 call while at the same time buying
ALGN stock for $33.25 will produce a new covered call with a target
return of 8.0%. Based on recent data, this trade will cost about
$30.55, which is also the covered call's breakeven point. At that
price, this covered call has 8.1% downside protection, while
seeking an assigned return of 8.0% return in 60 days. If ALGN is
higher than $33.00 on 8/18/2012, we are assured that simple return.
For comparison purposes only, that equates to an annualized return
rate of 47.5%.
EOG Resources (NYSE: EOG) has been selected by InvestorsObserver
analysts as a stock that is an ideal candidate for a new covered
call today. Buying the stock for $94.73 while simultaneously
selling the August $92.50 call will result in a new position with a
target return of 5.3%. Based on recent prices, this position will
cost about $87.88, which is also the trade's breakeven point. At
that level, this covered call has 7.2% downside protection, while
still providing a 5.3% return in 60 days as long as EOG is above
$92.50 on 8/18/2012. For comparison purposes only, this EOG
Resources covered call aims for an annualized return rate of 29.2%.
Fusion-io (AMEX: FIO) has been selected by InvestorsObserver
analysts as a stock that is a strong candidate for a new covered
call today. Selling the August $20.00 call while simultaneously
buying FIO stock for $20.86 will result in a new position with a
break-even point around $18.26. At that price, this position has a
target return of 9.5%. This trade has 12.5% downside protection,
while still providing a 9.5% return in 60 days as long as FIO is
above $20.00 on 8/18/2012. For comparison purposes only, this
covered call targets an annualized return rate of 54.8%.
Qualcomm (NASDAQ: QCOM) has been identified by InvestorsObserver
analysts as being well-positioned for a new covered call today.
Buying the stock for $56.77 while selling the October $55.00 call
will produce a new covered call with a break-even point around
$51.97. At that price, this position has a target return of 5.8%.
This trade will have roughly 8.5% downside protection, while still
aiming for a 5.8% return in 123 days. It will lock in that return
as long as Qualcomm is above $55.00 on 10/20/2012. For comparison
purposes only, this QCOM covered call aims for an annualized return
rate of 14.6%.
US Steel (NYSE: X) has been selected by InvestorsObserver analysts
as a stock that is an ideal candidate for a new covered call today.
Buying the stock for $18.41 while simultaneously selling the August
$18.00 call will result in a new position with a target return of
8.0%. Based on recent prices, this position will cost about $16.66,
which is also the trade's breakeven point. At that level, this
covered call has 9.5% downside protection, while still providing a
8.0% return in 60 days as long as X is above $18.00 on 8/18/2012.
For comparison purposes only, this US Steel covered call aims for
an annualized return rate of 47.5%.
*Annualized returns are shown for comparison purposes only
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NEWS LEADERS AND LAGGARDS
Stocks pointed higher this morning include Oracle (ORCL), Walgreen
(WAG) and NVIDIA Corp. (NVDA). Pointed lower this morning are J.C.
Penney (JCP), Expedia (EXPE) and HCP Inc. (HCP). Analyst upgrades
this morning include Healthcare Services Group (HCSG), Kennametal
(KMT) and United Microelectronics (UMC). Downgrades this morning
include Elster (ELT), Body Central (BODY) and Synacor (SYNC).
MARKET OVERVIEW
Stocks in Asia ended mostly lower today, thanks to escalating
concerns about Spanish debt. In addition, a strengthening yen took
its toll on Japanese exporters, with Panasonic and Toshiba each
shedding 1.4%. By the close, Japan's Nikkei gave up 0.8%, the
Shanghai Composite fell 0.7%, and Hong Kong's Hang Seng finished
0.1% lower. On the other hand, a slightly stronger-than-expected
Spanish debt auction triggered a collective sigh of relief across
the pond, with European indexes mostly higher at midday. Plus, some
traders appear to be hoping for the European Central Bank to prop
up Spanish bonds, after yields on the country's 10-year notes
jumped to a euro-era high on Monday. However, a downwardly revised
earnings forecast for France's Danone is weighing on food
producers. Against this backdrop, the FTSE 100 is up 1%, Germany's
DAX has added 0.6%, and France's CAC 40 has edged 0.3% higher.
The U.S. dollar index is 0.2% lower this morning, last seen near
$81.76. Crude oil is on the rebound, with July-dated oil pointed
0.2% higher at $83.73 per barrel. Gold futures are poised to tack
on some gains, as well, with the malleable metal up 0.3% at
$1,631.60 an ounce
PUT/CALL RATIO
Equity option activity on the Chicago Board Options Exchange (CBOE)
saw 1,081,996 call contracts traded on Monday, compared to 619,807
put contracts. The resultant single-session put/call ratio arrived
at 0.57, while the 21-day moving average was 0.73.
SUPPORT & RESISTANCE LEVELS
The S&P Depository Receipts (SPY) show support in the neighborhood
of $131.15 with resistance near $134.80. The Nasdaq 100 (QQQ) has
shown support around $61.65 and resistance around $64.05.
TODAY'S ECONOMIC CALENDAR
8:30 a.m. May Housing Starts
8:30 a.m. May Building Permits
EARNINGS EXPECTED TODAY
DFS
FDX
JBL
JEF
LZB
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