iShares MSCI-Brazil Index Fund (EWZ) 3/10/10 PriceWatch Alert Could Hit 25.09% Return
Posted: Wednesday, March 10, 2010 8:30 AM EDT
By: Market Intelligence Center Staff
iShares MSCI-Brazil Index Fund (PACF: EWZ) closed yesterday at $73.06. So far EWZ has hit a 52-week low of $34.04 and 52-week high of $80.93. EWZ has been showing support around 69.91 and resistance in the 75.23 range. Technical indicators are Bullish. EWZ appears on the Investors Observer Select ETF and HOLDR list. For a hedged play on this stock, look at a Jun '10 73 covered call for a net debit in the $68.26 area. That is also the break even stock price for this trade. This covered call has a 101 day duration, provides 6.57% downside protection and a 6.94% assigned return rate for a 25.09% 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 EWZ Jan '11 55 Call and selling the Jun '10 73 call for a $15.20 debit. The trade has a 101 day life and would provide 3.91% downside protection and an 18.42% assigned return rate for a 67.00% annualized return rate (for comparison purposes only). [WBA-Seven Summits Research]
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