ImClone Systems (IMCL) PriceWatch Alert Targets 13.42% Downside Protection

Posted: Monday, October 27, 2008 8:07 AM EDT
By: Market Intelligence Center Staff

ImClone Systems (NasdaqNM: IMCL) ended the last trading session at $67.79. So far the stock has hit a 52-week low of $36.87 and 52-week high of $69.50. ImClone Systems stock has been showing support around 66.61 and resistance in the 69.59 range. Technical indicators for the stock are Bullish and S&P gives IMCL a neutral 3 STAR (out of 5) hold rating. IMCL appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at a Jan '09 60 covered call (QCI AL) for a net debit in the $58.69 area. That is also the break even stock price for this trade. This covered call has an 82 day duration, provides 13.42% downside protection and a 2.23% assigned return rate for a 9.94% 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 IMCL Jan '10 45 Call (YCF AI) and selling the Jan '09 60 call (QCI AL) for a $14.30 debit. The trade has an 82 day life and would provide 12.52% downside protection and a 4.90% assigned return rate for a 22.00% annualized return rate (for comparison purposes only). ImClone Systems 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]