Hartford Financial (HIG) PriceWatch Alert Up To 21.66% Return

Posted: Wednesday, May 20, 2009 8:07 AM EDT
By: Market Intelligence Center Staff

Hartford Financial (NYSE: HIG) closed yesterday at $16.09. So far the stock has hit a 52-week low of $3.33 and 52-week high of $73.89. Hartford Financial stock has been showing support around 15.00 and resistance in the 17.36 range. Technical indicators for the stock are Bullish and S&P gives HIG a neutral 3 STAR (out of 5) hold rating. HIG appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Dec '09 9 covered call (HIG LD) for a net debit in the $7.99 area. That is also the break even stock price for this trade. This covered call has a 213 day duration, provides 50.34% downside protection and a 12.64% assigned return rate for a 21.66% 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 HIG Jan '10 5 Call (YAP AA) and selling the Dec '09 9 call (HIG LD) for a $3.35 debit. The trade has a 213 day life and would provide 48.10% downside protection and a 19.40% assigned return rate for a 33.00% annualized return rate (for comparison purposes only). Hartford Financial has a current annual dividend yield of 1.37%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]