MorningUpdate - Options Trading Email
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MORNING UPDATE: PriceWatch Alerts for WFC, TXN, WYNN, and More...
June 4, 8:30 AM ET - Before the open... PriceWatch Alerts for WFC,
TXN, YUM, GNC, PLCM, WYNN, CLF, DAL, CMI, and SCHW, Market
Overview, News Leaders and Laggards, Today's Economic Calendar, and
Index Support & Resistance Levels.
PriceWatch Alerts for WFC, TXN, YUM, GNC, PLCM, WYNN, CLF, DAL,
CMI, and SCHW
GNC Holdings (NYSE: GNC) has been chosen by InvestorsObserver
analysts as a candidate for a new covered call today. Selling the
July $35.00 call while at the same time buying GNC stock for $36.59
will produce a new covered call with a target return of 5.1%. Based
on recent data, this trade will cost about $33.29, which is also
the covered call's breakeven point. At that price, this covered
call has 9.0% downside protection, while seeking an assigned return
of 5.1% return in 47 days. If GNC is higher than $35.00 on
7/21/2012, we are assured that simple return. For comparison
purposes only, that equates to an annualized return rate of 36.5%.
Polycom (NASDAQ: PLCM) has been selected by InvestorsObserver
analysts as a stock that is a strong candidate for a new covered
call today. Selling the October $10.00 call while simultaneously
buying PLCM stock for $10.72 will result in a new position with a
break-even point around $8.77. At that price, this position has a
target return of 14.0%. This trade has 18.2% downside protection,
while still providing a 14.0% return in 138 days as long as PLCM is
above $10.00 on 10/20/2012. For comparison purposes only, this
Polycom covered call targets an annualized return rate of 36.5%.
Texas Instruments (NYSE: TXN) has been selected by
InvestorsObserver analysts as a stock that is an ideal candidate
for a new covered call today. Buying the stock for $27.00 while
simultaneously selling the July $27.00 call will result in a new
position with a target return of 5.0%. Based on recent prices, this
position will cost about $25.71, which is also the trade's
breakeven point. At that level, this covered call has 4.8% downside
protection, while still providing a 5.0% return in 47 days as long
as TXN is above $27.00 on 7/21/2012. For comparison purposes only,
this Texas Instruments covered call aims for an annualized return
rate of 36.5%.
Wells Fargo (NYSE: WFC) has been identified by InvestorsObserver
analysts as being well-positioned for a new covered call today.
Buying the stock for $30.16 while selling the July $30.00 call will
produce a new covered call with a break-even point around $28.36.
At that price, this position has a target return of 5.8%. This
trade will have roughly 6.0% downside protection, while still
aiming for a 5.8% return in 47 days. It will lock in that return as
long as Wells Fargo is above $30.00 on 7/21/2012. For comparison
purposes only, this WFC covered call aims for an annualized return
rate of 43.8%.
Yum Brands (NYSE: YUM) has been selected by InvestorsObserver
analysts as a stock that is an ideal candidate for a new covered
call today. Buying the stock for $64.70 while simultaneously
selling the October $62.50 call will result in a new position with
a target return of 6.7%. Based on recent prices, this position will
cost about $58.60, which is also the trade's breakeven point. At
that level, this covered call has 9.4% downside protection, while
still providing a 6.7% return in 138 days as long as YUM is above
$62.50 on 10/20/2012. For comparison purposes only, this Yum Brands
covered call aims for an annualized return rate of 14.6%.
Cliffs Natural Resources (NYSE: CLF) has been selected by
InvestorsObserver analysts as a stock that is an ideal candidate
for a new covered call today. Buying the stock for $46.08 while
simultaneously selling the July $46.00 call will result in a new
position with a target return of 9.3%. Based on recent prices, this
position will cost about $42.08, which is also the trade's
breakeven point. At that level, this covered call has 8.7% downside
protection, while still providing a 9.3% return in 47 days as long
as CLF is above $46.00 on 7/21/2012. For comparison purposes only,
this Cliffs Natural Resources covered call aims for an annualized
return rate of 69.4%.
Cummins (NYSE: CMI) has been chosen by InvestorsObserver analysts
as a candidate for a new covered call today. Selling the July
$92.50 call while at the same time buying CMI stock for $93.56 will
produce a new covered call with a target return of 6.0%. Based on
recent data, this trade will cost about $87.26, which is also the
covered call's breakeven point. At that price, this covered call
has 6.7% downside protection, while seeking an assigned return of
6.0% return in 47 days. If CMI is higher than $92.50 on 7/21/2012,
we are assured that simple return. For comparison purposes only,
that equates to an annualized return rate of 43.8%.
Delta Air Lines (NYSE: DAL) has been selected by InvestorsObserver
analysts as a stock that is an ideal candidate for a new covered
call today. Buying the stock for $11.51 while simultaneously
selling the September $11.00 call will result in a new position
with a target return of 11.8%. Based on recent prices, this
position will cost about $9.84, which is also the trade's breakeven
point. At that level, this covered call has 14.5% downside
protection, while still providing a 11.8% return in 110 days as
long as DAL is above $11.00 on 9/22/2012. For comparison purposes
only, this Delta Air Lines covered call aims for an annualized
return rate of 36.5%.
Charles Schwab (NYSE: SCHW) has been selected by InvestorsObserver
analysts as a stock that is a strong candidate for a new covered
call today. Selling the December $12.00 call while simultaneously
buying SCHW stock for $12.10 will result in a new position with a
break-even point around $10.80. At that price, this position has a
target return of 11.1%. This trade has 10.7% downside protection,
while still providing a 11.1% return in 201 days as long as SCHW is
above $12.00 on 12/22/2012. For comparison purposes only, this
Charles Schwab covered call targets an annualized return rate of
18.3%.
Wynn Resorts (NASDAQ: WYNN) has been identified by
InvestorsObserver analysts as being well-positioned for a new
covered call today. Buying the stock for $97.38 while selling the
July $95.00 call will produce a new covered call with a break-even
point around $89.28. At that price, this position has a target
return of 6.4%. This trade will have roughly 8.3% downside
protection, while still aiming for a 6.4% return in 47 days. It
will lock in that return as long as Wynn Resorts is above $95.00 on
7/21/2012. For comparison purposes only, this WYNN covered call
aims for an annualized return rate of 47.5%.
*Annualized returns are shown for comparison purposes only
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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 this morning include AutoNation (AN),
Walgreen (WAG) and Frontier Communications (FTR). Pointed lower
this morning are Advanced Micro Devices (AMD), Autozone (AZO) and
CF Industries (CF). Analyst upgrades this morning include Smart
Balance (SMBL), Boeing (BA) and KAR Auction Services (KAR).
Downgrades this morning include Huntington Bancorp (HBAN), Boston
Private Financial (BPFH) and National Penn (NPBC).
MARKET OVERVIEW
Asian markets ended significantly lower today, following suit with
Wall Street's dismal Friday performance. Bleak employment data from
the U.S. exacerbated fears over a global economic slowdown,
sparking a strong safe-haven bid for the Japanese yen. As a result,
exporters were among the top laggards in Tokyo. Meanwhile, Hong
Kong's main bourse joined the Dow industrials by dropping into
negative territory for the year. By the close, South Korea's Kospi
tumbled 2.8%, China's Shanghai Composite fell 2.7%, Hong Kong's
Hang Seng gave back 2%, and Japan's Nikkei declined 1.7%. It's a
mixed session in Europe at midday, with major regional benchmarks
wobbling between minor gains and modest losses. Relatively light
regional volume is contributing to the lack of direction, as
traders in London are on holiday. Shaky data on Chinese service-
sector growth is dragging on industrial stocks in Frankfurt, but a
bounce for the beaten-down banking sector is contributing to a
positive bias in Paris. At last check, the German DAX is down 0.4%,
while the French CAC 40 has edged up 0.8%.
The U.S. dollar index has pulled back this morning, with the
greenback last seen 0.2% lower at $82.77. Crude oil is poised to
continue with its recent sell-off, with the front-month contract
down 1.1% at $82.31 per barrel. Gold futures, meanwhile, are up
0.2% at $1,625.30 an ounce.
PUT/CALL RATIO
Equity option activity on the Chicago Board Options Exchange (CBOE)
saw 1,120,292 call contracts traded on Friday, compared to 904,614
put contracts. The resultant single-session put/call ratio arrived
at 0.81, while the 21-day moving average was 0.80.
SUPPORT & RESISTANCE LEVELS
The S&P Depository Receipts (SPY) show support in the neighborhood
of $127.30 with resistance near $132.85. The Nasdaq 100 (QQQ) has
shown support around $60.05 and resistance around $62.55.
TODAY'S ECONOMIC CALENDAR
10:00 a.m. April Factory Orders
EARNINGS EXPECTED TODAY
EDS
GIGA
NX
SHFL
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