Hartford Financial (HIG) 11/5/09 PriceWatch Alert With $18.14 Break Even

Posted: Thursday, November 05, 2009 8:28 AM EDT

Hartford Financial (NYSE: HIG) closed yesterday at $24.44. So far the stock has hit a 52-week low of $3.33 and 52-week high of $29.59. Hartford Financial stock has been showing support around 22.04 and resistance in the 28.62 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 Jan '10 19 covered call (HIG AS) for a net debit in the $18.14 area. That is also the break even stock price for this trade. This covered call has a 72 day duration, provides 25.78% downside protection and a 4.74% assigned return rate for a 24.03% 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 '11 5 Call (OZJ AA) and selling the Jan '10 19 call (HIG AS) for a $13.40 debit. The trade has a 72 day life and would provide 24.71% downside protection and a 4.48% assigned return rate for a 23.00% annualized return rate (for comparison purposes only). Hartford Financial has a current annual dividend yield of 0.81%. [THA-Seven Summits Research]

Click Symbol For More News On: (HIG)