Posted: Friday, January 23, 2015 8:00 AM ET
Blackstone Group LP (BX) is an excellent choice for either a diagonal spread or a covered call expiring in Jun. '15 at the $35.00 level according to MarketIntelligenceCenter.com’s patented algorithms.
A covered call on Blackstone Group for a net debit of about $33.99 would return 12.99% in 147 days if the stock expires above $35.00.
MarketIntelligenceCenter.com’s algorithms selected the Jan. '16 $27.00 call for the long position in a diagonal spread. This lowers the net debit to $7.08 but raises the assigned return rate to 12.99%.
"Diagonal spreads usually require less capital than covered calls,” said MarketIntelligenceCenter.com Managing Editor Bobby Raines. “That generally makes the return higher, but diagonal spreads are riskier than covered calls."
In the case of Jun. '15 trades on Blackstone Group, the covered call has a breakeven of $33.99, while in the case of the diagonal spread the breakeven point is at $34.08.
Blackstone Group traded between $34.75 and $35.99 before closing at $35.71 on Thursday. Technical indicators for the stock are bullish and Standard & Poor’s has a 12-month target price of $40.00.
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.