CF Industries (CF) PriceWatch Alert for August 27, 2008
Posted on Wednesday, August 27, 2008 8:07 AM
CF Industries (NYSE: CF) closed yesterday at $149.24. So far the stock has hit a 52-week low of $57.01 and 52-week high of $172.99. CF Industries stock has been showing support around 145.20 and resistance in the 151.52 range. Technical indicators for the stock are Bullish and S&P gives CF a neutral 3 STAR (out of 5) hold rating. CF appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Oct '08 145 covered call (CF JX) for a net debit in the $133.74 area. That is also the break even stock price for this trade. This covered call has a 52 day duration, provides 10.39% downside protection and an 8.42% assigned return rate for a 59.10% 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 CF Jan '10 40 Call (KDJ AH) and selling the Oct '08 145 call (CF JX) for a $95.60 debit. The trade has a 52 day life and would provide 9.14% downside protection and a 9.83% assigned return rate for a 69.00% annualized return rate (for comparison purposes only). CF Industries has a current annual dividend yield of 0.28%. [For more information on these strategies along with more details on possible risks go to
www.iotogo.com/HPWAinfo]