Direxion Daily Small Cap Bull 3X Shares (TNA) 2/9/10 PriceWatch Alert Targets 27.70% Downside Protection

Posted: Tuesday, February 09, 2010 8:37 AM EDT
By: Market Intelligence Center Staff

Direxion Daily Small Cap Bull 3X Shares (PACF: TNA) closed yesterday at $35.38. So far TNA has hit a 52-week low of $10.21 and 52-week high of $50.61. TNA has been showing support around 34.10 and resistance in the 37.68 range. Technical indicators are Bearish. TNA appears on the Investors Observer Select ETF and HOLDR list. For a hedged play on this stock, look at a Jul '10 29 covered call for a net debit in the $25.58 area. That is also the break even stock price for this trade. This covered call has a 158 day duration, provides 27.70% downside protection and a 13.37% assigned return rate for a 30.89% 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 TNA Jan '11 20 Call and selling the Jul '10 29 call for an $8.20 debit. The trade has a 158 day life and would provide 20.29% downside protection and a 9.76% assigned return rate for a 23.00% annualized return rate (for comparison purposes only). [ATU-Seven Summits Research]