iShares MSCI-South Korea Index Fund (EWY) 3/17/10 PriceWatch Alert Could Hit 17.27% Return
Posted: Wednesday, March 17, 2010 8:28 AM EDT
By: Market Intelligence Center Staff
iShares MSCI-South Korea Index Fund (PACF: EWY) closed yesterday at $48.58. So far EWY has hit a 52-week low of $25.57 and 52-week high of $50.54. EWY has been showing support around 48.00 and resistance in the 48.88 range. Technical indicators are Bullish. EWY appears on the Investors Observer Select ETF and HOLDR list. For a hedged play on this stock, look at a Jul '10 48 covered call for a net debit in the $45.38 area. That is also the break even stock price for this trade. This covered call has a 122 day duration, provides 6.59% downside protection and a 5.77% assigned return rate for a 17.27% 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 EWY Jan '11 30 Call and selling the Jul '10 48 call for a $15.80 debit. The trade has a 122 day life and would provide 5.72% downside protection and a 13.92% assigned return rate for a 42.00% annualized return rate (for comparison purposes only). [WBA-Seven Summits Research]
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