SPDR Homebuilders ETF (XHB) 2/8/10 PriceWatch Alert Targets 22.92% Return
Posted: Monday, February 08, 2010 8:03 AM EDT
By: Market Intelligence Center Staff
SPDR Homebuilders ETF (PACF: XHB) ended the last trading session at $15.02. So far XHB has hit a 52-week low of $8.00 and 52-week high of $16.75. XHB has been showing support around 14.33 and resistance in the 15.57 range. Technical indicators are Bearish. XHB appears on the Investors Observer Select ETF and HOLDR list. For a hedged play on this stock, look at a Jun '10 15 covered call for a net debit in the $13.86 area. That is also the break even stock price for this trade. This covered call has a 131 day duration, provides 7.72% downside protection and an 8.23% assigned return rate for a 22.92% 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 XHB Jan '11 10 Call and selling the Jun '10 15 call for a $4.19 debit. The trade has a 131 day life and would provide 5.53% downside protection and a 19.33% assigned return rate for a 54.00% annualized return rate (for comparison purposes only). [ABR-Seven Summits Research]
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