Royal Bank of Canada (RY) PriceWatch Alert With 8.07% Downside Protection

Posted: Monday, July 06, 2009 8:07 AM EDT

Royal Bank of Canada (NYSE: RY) closed yesterday at $40.89. So far the stock has hit a 52-week low of $20.51 and 52-week high of $51.83. Royal Bank of Canada stock has been showing support around 40.09 and resistance in the 41.85 range. Technical indicators for the stock are Bullish and S&P gives RY a positive 4 STAR (out of 5) buy rating. RY appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at an Oct '09 40 covered call (RY JH) for a net debit in the $37.59 area. That is also the break even stock price for this trade. This covered call has a 103 day duration, provides 8.07% downside protection and a 6.41% assigned return rate for a 22.72% annualized return rate (comparison purposes only). Royal Bank of Canada has a current annual dividend yield of 4.75%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]

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