Tech Data (TECD) NewsBite

Posted on Monday, June 30, 2008 9:40 AM

Tech Data (NasdaqNM: TECD) ended the last trading session at $34.13. So far the stock has hit a 52-week low of $30.91 and 52-week high of $41.40. Tech Data stock has been showing support around 33.59 and resistance in the 34.45 range. Technical indicators for the stock are Bearish and S&P gives TECD a very weak 1 STAR (out of 5) strong sell rating. For a hedged play on this stock, look at a Jan '09 30 covered call (OQT AF) for a net debit in the $28.63 area. That is also the break even stock price for this trade. This covered call has a 201 day duration, provides 16.11% downside protection and a 4.79% assigned return rate for an 8.69% 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 TECD Jan '09 25 Call (OQT AE) and selling the Jan '09 30 call (OQT AF) for a $4.45 debit. The trade has a 201 day life and would provide 13.71% downside protection and a 12.36% assigned return rate for a 22.00% annualized return rate (for comparison purposes only). Tech Data does not pay dividends at this time. [IHF - Investors Observer]