Ford Motor (F) 3/19/10 PriceWatch Alert Targets 21.78% Return

Posted: Friday, March 19, 2010 8:28 AM EDT
By: Market Intelligence Center Staff

Ford Motor (NYSE: F) closed yesterday at $13.73. So far the stock has hit a 52-week low of $2.28 and 52-week high of $14.54. Ford Motor stock has been showing support around 13.08 and resistance in the 14.86 range. Technical indicators for the stock are Bullish and S&P gives F a neutral 3 STAR (out of 5) hold rating. F appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Sep '10 13 covered call for a net debit in the $11.72 area. That is also the break even stock price for this trade. This covered call has an 183 day duration, provides 14.64% downside protection and a 10.92% assigned return rate for a 21.78% 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 F Jan '11 10 Call and selling the Sep '10 13 call for a $2.09 debit. The trade has an 183 day life and would provide 11.94% downside protection and a 43.54% assigned return rate for an 87.00% annualized return rate (for comparison purposes only). Ford Motor does not pay dividends at this time. [FBB-Seven Summits Research]