Posted: Monday, December 22, 2014 8:00 AM ET
Metlife Inc. (MET) presents a trading opportunity that offers a 4.62% return in just 60 days. A covered call on MetLife at the $55.00 level expiring on Feb. '15 offers an assigned return rate of 4.62% or 28.12% annualized. This trade offers 2.32% downside protection, and offers some profit so long as the stock closes above $52.57 at expiration. A lower-cost hedged trade on MetLife would involve buying the Jan. '16 $35.00 for about $19.55 instead of taking a long position on MET and pairing it with the same sold call. This positions costs $18.30 instead of the $52.57 it costs to initiated the covered call. This trade has an assigned return rate of 9.29%. In this position the stock can fall by 0.97% before any losses are incurred. This trade has an assigned return rate of 9.29% or 57% annualized (for comparison purposes only). MetLife has traded between $46.15 and $57.57 over the last 52 weeks and traded between $53.21 and $54.21 Friday. Technical indicators are bearish and support has been near $52.75 and resistance has been around $54.75.
Don't miss out on the most important market news delivered daily to your inbox every market morning for FREE!
About Market Intelligence Center |
Contact Us |
Terms of Service
Investors Observer |
Market Intelligence Center |
Fresh Brewed Media News |
S&P Option Strategies |
Fresh Brewed Media
Portions of this content may be copyright by Fresh Brewed Media, Investors Observer, and/or O2 Media LLC. Portions of this content are protected by the following US Patents: 7,716,116; 7,856,390; 7,865,496; 8,463,695; 8,494,944; and 8,676,691.