SPDR S&P Retail ETF (XRT) 2/9/10 PriceWatch Alert Targets 6.90% Downside Protection
Posted: Tuesday, February 09, 2010 8:40 AM EDT
By: Market Intelligence Center Staff
SPDR S&P Retail ETF (PACF: XRT) closed yesterday at $34.51. So far XRT has hit a 52-week low of $17.85 and 52-week high of $37.03. XRT has been showing support around 34.17 and resistance in the 35.17 range. Technical indicators are Bearish. XRT appears on the Investors Observer Select ETF and HOLDR list. For a hedged play on this stock, look at a Jun '10 34 covered call for a net debit in the $32.13 area. That is also the break even stock price for this trade. This covered call has a 130 day duration, provides 6.90% downside protection and a 5.82% assigned return rate for a 16.34% 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 XRT Jan '11 24 Call and selling the Jun '10 34 call for an $8.67 debit. The trade has a 130 day life and would provide 5.33% downside protection and a 15.34% assigned return rate for a 43.00% annualized return rate (for comparison purposes only). [ATU-Seven Summits Research]
CLICK HERE: FREE (XRT) Stock ReportSee what our analysts have uncovered about (XRT).