Bally Technologies (BYI) Down Over 3% On Heavy Volume

Posted: Friday, November 13, 2009 8:55 AM EDT

Bally Technologies (NYSE: BYI) closed yesterday at $42.48. So far the stock has hit a 52-week low of $12.21 and 52-week high of $45.32. Bally Technologies stock has been showing support around 40.97 and resistance in the 44.79 range. Technical indicators for the stock are Bullish and S&P gives BYI a positive 4 STAR (out of 5) buy rating. BYI appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '10 40 covered call (BYI AH) for a net debit in the $37.88 area. That is also the break even stock price for this trade. This covered call has a 64 day duration, provides 10.83% downside protection and a 5.60% assigned return rate for a 31.92% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the BYI Jan '11 12.50 Call (VHA AV) and selling the Jan '10 40 call (BYI AH) for a $26.50 debit. The trade has a 64 day life and would provide 8.19% downside protection and a 3.77% assigned return rate for a 22.00% annualized return rate (for comparison purposes only). Bally Technologies does not pay dividends at this time. [FBB-Seven Summits Research]

Click Symbol For More News On: (BYI)