NDS Group Plc (NNDS) PriceWatch Alert Could Hit 8.18% Return

Posted on Thursday, July 03, 2008 8:07 AM

NDS Group Plc (NasdaqNM: NNDS) closed yesterday at $58.50. So far the stock has hit a 52-week low of $38.73 and 52-week high of $63.57. NDS Group stock has been showing support around 58.17 and resistance in the 59.01 range. Technical indicators for the stock are Bullish and S&P gives NNDS a neutral 3 STAR (out of 5) hold rating. NNDS appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at a Jan '09 60 covered call (DQD AL) for a net debit in the $57.45 area. That is also the break even stock price for this trade. This covered call has a 198 day duration, provides 1.79% downside protection and a 4.44% assigned return rate for an 8.18% 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 NNDS Jan '09 50 Call (DQD AJ) and selling the Jan '09 60 call (DQD AL) for an $8.60 debit. The trade has a 198 day life and would provide no downside protection and a 16.28% assigned return rate for a 30.00% annualized return rate (for comparison purposes only). NDS Group does not pay dividends at this time. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]