Zions Bancorporation (ZION) 2/9/10 PriceWatch Alert With $12.59 Break Even

Posted: Tuesday, February 09, 2010 8:33 AM EDT
By: Market Intelligence Center Staff

Zions Bancorporation (NASDAQ: ZION) closed yesterday at $17.99. So far the stock has hit a 52-week low of $5.90 and 52-week high of $20.97. Zions Bancorporation stock has been showing support around 17.08 and resistance in the 19.24 range. Technical indicators for the stock are Bullish and S&P gives ZION a neutral 3 STAR (out of 5) hold rating. ZION appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jan '11 15 covered call for a net debit in the $12.59 area. That is also the break even stock price for this trade. This covered call has a 347 day duration, provides 30.02% downside protection and a 19.14% assigned return rate for a 20.14% 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 ZION Jan '11 10 Call and selling the Jan '11 15 call for a $3.70 debit. The trade has a 347 day life and would provide 23.85% downside protection and a 35.14% assigned return rate for a 37.00% annualized return rate (for comparison purposes only). Zions Bancorporation has a current annual dividend yield of 0.23%. [ATU-Seven Summits Research]