CIT Group (CIT) 2/8/10 PriceWatch Alert Down To $24.60 Break Even

Posted: Monday, February 08, 2010 8:21 AM EDT
By: Market Intelligence Center Staff

CIT Group (NYSE: CIT) ended the last trading session at $30.75. So far the stock has hit a 52-week low of $24.83 and 52-week high of $35.00. CIT Group stock has been showing support around 28.62 and resistance in the 32.26 range. Technical indicators for the stock are Bearish. CIT appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Apr '10 26 covered call for a net debit in the $24.60 area. That is also the break even stock price for this trade. This covered call has a 68 day duration, provides 20.00% downside protection and a 5.69% assigned return rate for a 30.55% 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 CIT Jan '11 15 Call and selling the Apr '10 26 call for a $10.70 debit. The trade has a 68 day life and would provide 16.42% downside protection and a 2.80% assigned return rate for a 15.00% annualized return rate (for comparison purposes only). CIT Group does not pay dividends at this time. [ABR-Seven Summits Research]