MorningUpdate - Options Trading Email
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MORNING UPDATE: PriceWatch Alerts for MS, DELL, JCP, and More...
August 21, 9:00 AM ET - Before the open... PriceWatch Alerts for
MS, JCP, HRB, AAP, QIHU, DELL, AGU, DHI, LCC, and CPN, Market
Overview, News Leaders and Laggards, Today's Economic Calendar, and
Index Support & Resistance Levels.
PriceWatch Alerts for MS, JCP, HRB, AAP, QIHU, DELL, AGU, DHI, LCC,
and CPN
Advance Auto Parts (NYSE: AAP) has been chosen by InvestorsObserver
analysts as a candidate for a new covered call today. Selling the
December $70.00 call while at the same time buying AAP stock for
$71.58 will produce a new covered call with a target return of
6.3%. Based on recent data, this trade will cost about $65.88,
which is also the covered call's breakeven point. At that price,
this covered call has 8.0% downside protection, while seeking an
assigned return of 6.3% return in 123 days. If AAP is higher than
$70.00 on 12/22/2012, we are assured that simple return. For
comparison purposes only, that equates to an annualized return rate
of 18.3%.
H&R Block (NYSE: HRB) has been selected by InvestorsObserver
analysts as a stock that is an ideal candidate for a new covered
call today. Buying the stock for $16.96 while simultaneously
selling the April $17.00 call will result in a new position with a
target return of 7.2%. Based on recent prices, this position will
cost about $15.86, which is also the trade's breakeven point. At
that level, this covered call has 6.5% downside protection, while
still providing a 7.2% return in 242 days as long as HRB is above
$17.00 on 4/20/2013. For comparison purposes only, this H&R Block
covered call aims for an annualized return rate of 7.3%.
JC Penney (NYSE: JCP) has been selected by InvestorsObserver
analysts as a stock that is an ideal candidate for a new covered
call today. Buying the stock for $24.66 while simultaneously
selling the October $24.00 call will result in a new position with
a target return of 6.9%. Based on recent prices, this position will
cost about $22.45, which is also the trade's breakeven point. At
that level, this covered call has 9.0% downside protection, while
still providing a 6.9% return in 60 days as long as JCP is above
$24.00 on 10/20/2012. For comparison purposes only, this JC Penney
covered call aims for an annualized return rate of 40.2%.
Morgan Stanley (NYSE: MS) has been identified by InvestorsObserver
analysts as being well-positioned for a new covered call today.
Buying the stock for $14.83 while selling the January $14.00 call
will produce a new covered call with a break-even point around
$12.94. At that price, this position has a target return of 8.2%.
This trade will have roughly 12.7% downside protection, while still
aiming for a 8.2% return in 151 days. It will lock in that return
as long as Morgan Stanley is above $14.00 on 1/19/2013. For
comparison purposes only, this MS covered call aims for an
annualized return rate of 18.3%.
Qihoo 360 Technology (NYSE: QIHU) has been selected by
InvestorsObserver analysts as a stock that is a strong candidate
for a new covered call today. Selling the October $20.00 call while
simultaneously buying QIHU stock for $20.21 will result in a new
position with a break-even point around $18.41. At that price, this
position has a target return of 8.6%. This trade has 8.9% downside
protection, while still providing a 8.6% return in 60 days as long
as QIHU is above $20.00 on 10/20/2012. For comparison purposes
only, this Qihoo 360 Technology covered call targets an annualized
return rate of 51.1%.
Agrium (NYSE: AGU) has been selected by InvestorsObserver analysts
as a stock that is an ideal candidate for a new covered call today.
Buying the stock for $101.16 while simultaneously selling the
January $100.00 call will result in a new position with a target
return of 6.7%. Based on recent prices, this position will cost
about $93.76, which is also the trade's breakeven point. At that
level, this covered call has 7.3% downside protection, while still
providing a 6.7% return in 151 days as long as AGU is above $100.00
on 1/19/2013. For comparison purposes only, this Agrium covered
call aims for an annualized return rate of 14.6%.
Calpine (NYSE: CPN) has been selected by InvestorsObserver analysts
as a stock that is a strong candidate for a new covered call today.
Selling the January $17.50 call while simultaneously buying CPN
stock for $17.48 will result in a new position with a break-even
point around $16.38. At that price, this position has a target
return of 6.8%. This trade has 6.3% downside protection, while
still providing a 6.8% return in 151 days as long as CPN is above
$17.50 on 1/19/2013. For comparison purposes only, this Calpine
covered call targets an annualized return rate of 14.6%.
Dell (NASDAQ: DELL) has been identified by InvestorsObserver
analysts as being well-positioned for a new covered call today.
Buying the stock for $12.56 while selling the January $12.50 call
will produce a new covered call with a break-even point around
$11.47. At that price, this position has a target return of 9.0%.
This trade will have roughly 8.7% downside protection, while still
aiming for a 9.0% return in 151 days. It will lock in that return
as long as Dell is above $12.50 on 1/19/2013. For comparison
purposes only, this DELL covered call aims for an annualized return
rate of 18.3%.
D R Horton (NYSE: DHI) 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 November $18.00 call will result in a new position with
a target return of 6.4%. Based on recent prices, this position will
cost about $16.91, which is also the trade's breakeven point. At
that level, this covered call has 8.1% downside protection, while
still providing a 6.4% return in 88 days as long as DHI is above
$18.00 on 11/17/2012. For comparison purposes only, this D R Horton
covered call aims for an annualized return rate of 25.6%.
US Airways (NYSE: LCC) has been chosen by InvestorsObserver
analysts as a candidate for a new covered call today. Selling the
December $10.00 call while at the same time buying LCC stock for
$10.59 will produce a new covered call with a target return of
14.4%. Based on recent data, this trade will cost about $8.74,
which is also the covered call's breakeven point. At that price,
this covered call has 17.5% downside protection, while seeking an
assigned return of 14.4% return in 123 days. If LCC is higher than
$10.00 on 12/22/2012, we are assured that simple return. For
comparison purposes only, that equates to an annualized return rate
of 40.2%.
*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 Urban Outfitters (URBN),
Genworth Financial (GNW) and Gap (GPS). Pointed lower this morning
are Fossil (FOSL), Cummins (CMI) and Micron Technology (MU).
Analyst upgrades this morning include Credicorp (BAP), Urban
Outfitters (URBN) and Washington REIT (WRE). This morning�s list of
downgrades includes ABB (ABB), CIBER (CBR) and Worthington
Industries (WOR).
MARKET OVERVIEW
European markets are posting gains after a well received Spanish
debt auction bolsters hopes the ECB will continue to intervene in
markets to help fiscally fragile economies. The sentiment is in
opposition to comments yesterday by the bank stating caps may be
put in place on euro zone government bond yields. In the coming
days there are some top meetings between European leaders which
investors are eagerly awaiting. German Chancellor Angela Merkel
will meet French President Francois Hollande, while Greek Prime
Minister Antonis Samaras will visit Berlin and Paris later in the
week.
Asian markets had a mixed ending with Australia once again tapping
a new three month high while Hong Kong was weighed down by worse
than expected results in the oil industry. Australia was helped
when Xinhua reported a $236 billion stimulus package in the Chinese
city of Chongqing spurring speculation more growth in China may aid
the Australian economy. Earnings also remained a focus, as a number
of local companies reported.
In the commodities market crude oil futures are rising this morning
with WTI higher at $96.76 while Brent posted a 0.8% gain, coming in
at $114.61 with natural gas climbing 1.66% to trade at $2.82.
Precious metals are moving up this morning with gold posting a
small gain at $1,629.40 and silver adding 2.59% at $28.91. The
dollar lost ground against the euro, the British pound and versus
the Japanese yen.
PUT/CALL RATIO
Yesterday, 1,135,316 call contracts traded on the Chicago Board
Options Exchange (CBOE) compared to 699,997 put contracts. The
single-session put/call ratio rebounded to 0.62, while the 20-day
moving average continued lower to 0.647.
SUPPORT & RESISTANCE LEVELS
The S&P 500 Depository Receipts (SPY) show support near $139.80 and
is trading above recent resistance levels in pre-market activity.
The Nasdaq 100 (QQQ) has developed support around $66.40.
TODAY'S ECONOMIC CALENDAR
2:00 p.m. 7/31 FOMC Minutes
EARNINGS EXPECTED TODAY
ADI
BBY
DELL
LZB
MDT
QIHU
TSL
WSM
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