Ryland Group (RYL) Trading On Heavy Volume

Posted: Wednesday, March 03, 2010 8:40 AM EDT
By: Market Intelligence Center Staff

Ryland Group (NYSE: RYL) closed yesterday at $23.65. So far the stock has hit a 52-week low of $11.95 and 52-week high of $24.94. Ryland Group stock has been showing support around 23.03 and resistance in the 24.01 range. Technical indicators for the stock are Bullish and S&P gives RYL a neutral 3 STAR (out of 5) hold rating. RYL appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Oct '10 23 covered call for a net debit in the $20.35 area. That is also the break even stock price for this trade. This covered call has a 227 day duration, provides 13.95% downside protection and a 13.02% assigned return rate for a 20.94% 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 RYL Jan '11 15 Call and selling the Oct '10 23 call for a $6.15 debit. The trade has a 227 day life and would provide 10.57% downside protection and a 30.08% assigned return rate for a 48.00% annualized return rate (for comparison purposes only). Ryland Group has a current annual dividend yield of 0.53%. [WBA-Seven Summits Research]