Kinross Gold (KGC) 2/9/10 PriceWatch Alert Bearish Price Movement

Posted: Tuesday, February 09, 2010 8:38 AM EDT
By: Market Intelligence Center Staff

Kinross Gold (NYSE: KGC) closed yesterday at $16.65. So far the stock has hit a 52-week low of $13.62 and 52-week high of $23.91. Kinross Gold stock has been showing support around 16.14 and resistance in the 17.56 range. Technical indicators for the stock are Bearish. KGC appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a May '10 15 covered call for a net debit in the $14.15 area. That is also the break even stock price for this trade. This covered call has a 102 day duration, provides 15.02% downside protection and a 6.01% assigned return rate for a 21.50% 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 KGC Jan '11 7.50 Call and selling the May '10 15 call for a $7.20 debit. The trade has a 102 day life and would provide 11.71% downside protection and a 4.17% assigned return rate for a 15.00% annualized return rate (for comparison purposes only). Kinross Gold has a current annual dividend yield of 0.61%. [ATU-Seven Summits Research]