Simon Property Group (SPG) PriceWatch Alert Targets 12.83% Downside Protection

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

Simon Property Group (NYSE: SPG) closed yesterday at $48.32. So far the stock has hit a 52-week low of $24.27 and 52-week high of $106.43. Simon Property Group stock has been showing support around 46.38 and resistance in the 51.86 range. Technical indicators for the stock are Bearish and S&P gives SPG a very positive 5 STAR (out of 5) strong buy rating. SPG appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at an Oct '09 46 covered call (SPG JU) for a net debit in the $42.12 area. That is also the break even stock price for this trade. This covered call has a 103 day duration, provides 12.83% downside protection and a 9.21% assigned return rate for a 32.64% 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 SPG Jan '11 25 Call (OVR AE) and selling the Oct '09 46 call (SPG JU) for an $18.30 debit. The trade has a 103 day life and would provide 10.39% downside protection and a 14.75% assigned return rate for a 52.00% annualized return rate (for comparison purposes only). Simon Property Group has a current annual dividend yield of 6.42%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]

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