BP (BP) PriceWatch Alert Could Hit 25.68% Return

Posted: Monday, October 13, 2008 8:07 AM EDT

BP (NYSE: BP) ended the last trading session at $40.55. So far the stock has hit a 52-week low of $37.57 and 52-week high of $79.77. BP stock has been showing support around 35.58 and resistance in the 44.52 range. Technical indicators for the stock are Bearish and S&P gives BP a neutral 3 STAR (out of 5) hold rating. BP appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at an Apr '09 40 covered call (BP DH) for a net debit in the $35.35 area. That is also the break even stock price for this trade. This covered call has an 187 day duration, provides 12.82% downside protection and a 13.15% assigned return rate for a 25.68% annualized return rate (comparison purposes only). BP has a current annual dividend yield of 6.96%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]

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