MorningUpdate - Options Trading Email
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MORNING UPDATE: PriceWatch Alerts for V, EXPE, FOSL, and More...
July 3, 8:30 AM ET - Before the open... PriceWatch Alerts for V,
EXPE, FOSL, LTD, and TIBX, Market Overview, News Leaders and
Laggards, Today's Economic Calendar, and Index Support & Resistance
Levels.
PriceWatch Alerts for V, EXPE, FOSL, LTD, and TIBX
Expedia (NASDAQ: EXPE) has been selected by InvestorsObserver
analysts as a stock that is an ideal candidate for a new covered
call today. Buying the stock for $49.19 while simultaneously
selling the October $49.00 call will result in a new position with
a target return of 9.2%. Based on recent prices, this position will
cost about $44.89, which is also the trade's breakeven point. At
that level, this covered call has 8.7% downside protection, while
still providing a 9.2% return in 109 days as long as EXPE is above
$49.00 on 10/20/2012. For comparison purposes only, this Expedia
covered call aims for an annualized return rate of 29.2%.
Fossil (NASDAQ: FOSL) has been selected by InvestorsObserver
analysts as a stock that is an ideal candidate for a new covered
call today. Buying the stock for $74.88 while simultaneously
selling the September $70.00 call will result in a new position
with a target return of 7.2%. Based on recent prices, this position
will cost about $65.28, which is also the trade's breakeven point.
At that level, this covered call has 12.8% downside protection,
while still providing a 7.2% return in 81 days as long as FOSL is
above $70.00 on 9/22/2012. For comparison purposes only, this
Fossil covered call aims for an annualized return rate of 29.2%.
Limited Brands (NYSE: LTD) has been chosen by InvestorsObserver
analysts as a candidate for a new covered call today. Selling the
November $43.00 call while at the same time buying LTD stock for
$43.95 will produce a new covered call with a target return of
6.0%. Based on recent data, this trade will cost about $40.55,
which is also the covered call's breakeven point. At that price,
this covered call has 7.7% downside protection, while seeking an
assigned return of 6.0% return in 137 days. If LTD is higher than
$43.00 on 11/17/2012, we are assured that simple return. For
comparison purposes only, that equates to an annualized return rate
of 14.6%.
TIBCO Software (NASDAQ: TIBX) has been selected by
InvestorsObserver analysts as a stock that is a strong candidate
for a new covered call today. Selling the August $30.00 call while
simultaneously buying TIBX stock for $30.62 will result in a new
position with a break-even point around $28.77. At that price, this
position has a target return of 4.3%. This trade has 6.0% downside
protection, while still providing a 4.3% return in 46 days as long
as TIBX is above $30.00 on 8/18/2012. For comparison purposes only,
this TIBCO Software covered call targets an annualized return rate
of 32.9%.
Visa (NYSE: V) has been identified by InvestorsObserver analysts as
being well-positioned for a new covered call today. Buying the
stock for $126.62 while selling the September $125.00 call will
produce a new covered call with a break-even point around $120.02.
At that price, this position has a target return of 4.1%. This
trade will have roughly 5.2% downside protection, while still
aiming for a 4.1% return in 81 days. It will lock in that return as
long as Visa is above $125.00 on 9/22/2012. For comparison purposes
only, this V covered call aims for an annualized return rate of
18.3%.
*Annualized returns are shown for comparison purposes only
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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 Micron Technology (MU),
Best Buy (BBY), and Apollo Group (APOL). Pointed lower this morning
are WPX Energy (WPX), Air Products and Chemicals (APD), and
Rockwell Automation (ROK). Analyst upgrades this morning include
Eastman Chemical (EMN), Gardner (GDI) and Nanosphere (NSPH).
Downgrades this morning include Anworth Mortgage (ANH), Bank of
Kentucky (BKYF) and Triangle Capital (TCAP).
MARKET OVERVIEW
Asian markets finished the day mostly higher as investors in the
region look for the European Central Bank and the Federal Reserve
to do more to boost the ailing economies. European stocks gained
ground again today with commodity interests driving markets higher
while banks were hurt by the news Barclays CEO is stepping down.
The announcement initially sent bank shares lower, then the sector
shot up after news of the departure was released. The European
Central Bank and Bank of England both hold monetary policy meetings
Thursday which are expected to move the markets significantly.
Crude oil futures are having a strong morning, up more than 2% from
yesterday's close in early trading. Other energy issues are also in
positive territory so far today. In the precious metals pits, gold,
silver, and copper are all higher as well.
PUT/CALL RATIO
Equity option activity on the Chicago Board Options Exchange (CBOE)
saw 759,446 call contracts traded on Monday, compared to 548,822
put contracts. The resultant single-session put/call ratio was 0.72
on very light volume due to the coming holiday.
SUPPORT & RESISTANCE LEVELS
The S&P Depository Receipts (SPY) show support in the neighborhood
of $130.85 is above recent resistance levels. The Nasdaq 100 (QQQ)
has shown support around $61.50 and resistance around $64.55.
TODAY'S ECONOMIC CALENDAR
10:00 a.m. May Factory Orders
2:00 p.m. June Auto & Truck Sales
EARNINGS EXPECTED TODAY
No major earnings announcements expected today
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