Posted: Friday, February 6, 2015 8:00 AM ET
MarketIntelligenceCenter.com's patented algorithms have selected a trade on JA Solar Holdings Co Ltd (JASO) that returns 13.21% in 224 days for an annualized return rate of 22%.
This diagonal spread pairs a short position in the Sep. '15 $8.00 call, with a long position in the Jan. '16 $5.00 for a net debit of about $2.65.
For a more conservative trade, a covered call using the same sold option yields 13.64% or 22.22% annualized. The net debit rises to $7.04, but the downside protection rises to 18.04%, compared to just 10.94% for the diagonal spread.
JA Solar moved between $8.40 and $8.70 before closing at $8.59 on Thursday. Support has been near $8.26 and resistance has been close to $8.86. Standard & Poor’s gives the stock 4 STARS (out of 5) buy ranking.
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