Icici Bank (IBN) 11/3/09 PriceWatch Alert At $26.90 Break Even

Posted: Tuesday, November 03, 2009 8:43 AM EDT
By: Market Intelligence Center Staff

Icici Bank (NYSE: IBN) closed yesterday at $32.80. So far the stock has hit a 52-week low of $9.60 and 52-week high of $41.65. Icici Bank stock has been showing support around 31.73 and resistance in the 33.57 range. Technical indicators for the stock are Bearish. IBN appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Mar '10 30 covered call (IBN CF) for a net debit in the $26.90 area. That is also the break even stock price for this trade. This covered call has a 137 day duration, provides 17.99% downside protection and an 11.52% assigned return rate for a 30.70% 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 IBN Jan '11 15 Call (VCD AC) and selling the Mar '10 30 call (IBN CF) for a $12.80 debit. The trade has a 137 day life and would provide 15.24% downside protection and a 17.19% assigned return rate for a 46.00% annualized return rate (for comparison purposes only). Icici Bank has a current annual dividend yield of 1.36%. [ATU-Seven Summits Research]