Mobile Telesystems OJSC (MBT) 10/28/09 PriceWatch Alert At $42.42 Break Even

Posted: Wednesday, October 28, 2009 8:10 AM EDT
By: Market Intelligence Center Staff

Mobile Telesystems OJSC (NYSE: MBT) closed yesterday at $47.32. So far the stock has hit a 52-week low of $18.36 and 52-week high of $55.71. Mobile Telesystems OJSC stock has been showing support around 45.91 and resistance in the 49.71 range. Technical indicators for the stock are Bearish and S&P gives MBT a neutral 3 STAR (out of 5) hold rating. MBT appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Dec '09 45 covered call (MBT LI) for a net debit in the $42.42 area. That is also the break even stock price for this trade. This covered call has a 52 day duration, provides 10.36% downside protection and a 6.08% assigned return rate for a 42.69% 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 MBT Jan '11 17.50 Call (OVD AW) and selling the Dec '09 45 call (MBT LI) for a $25.65 debit. The trade has a 52 day life and would provide 8.81% downside protection and a 7.21% assigned return rate for a 51.00% annualized return rate (for comparison purposes only). Mobile Telesystems OJSC has a current annual dividend yield of 5.22%. [WBA-Seven Summits Research]