Nasdaq Stock Market (NDAQ) PriceWatch Alert for November 6, 2009

Posted: Friday, November 06, 2009 8:38 AM EDT
By: Market Intelligence Center Staff

Nasdaq Stock Market (NasdaqNM: NDAQ) closed yesterday at $18.07. So far the stock has hit a 52-week low of $14.96 and 52-week high of $32.00. Nasdaq Stock Market stock has been showing support around 17.40 and resistance in the 18.88 range. Technical indicators for the stock are Bearish and S&P gives NDAQ a positive 4 STAR (out of 5) buy rating. NDAQ appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jun '10 18 covered call (NQD FO) for a net debit in the $15.77 area. That is also the break even stock price for this trade. This covered call has a 225 day duration, provides 12.73% downside protection and a 14.14% assigned return rate for a 22.94% 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 NDAQ Jan '11 10 Call (XGV AB) and selling the Jun '10 18 call (NQD FO) for a $6.50 debit. The trade has a 225 day life and would provide 8.69% downside protection and a 23.08% assigned return rate for a 37.00% annualized return rate (for comparison purposes only). Nasdaq Stock Market does not pay dividends at this time. [FBB-Seven Summits Research]