Vodafone Group (VOD) 11/6/09 PriceWatch Alert Targets 7.45% Downside Protection

Posted: Friday, November 06, 2009 8:42 AM EDT

Vodafone Group (NasdaqNM: VOD) closed yesterday at $22.83. So far the stock has hit a 52-week low of $15.46 and 52-week high of $23.85. Vodafone Group stock has been showing support around 22.54 and resistance in the 23.26 range. Technical indicators for the stock are Bullish and S&P gives VOD a neutral 3 STAR (out of 5) hold rating. VOD appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Apr '10 22.50 covered call (VOD DX) for a net debit in the $21.13 area. That is also the break even stock price for this trade. This covered call has a 162 day duration, provides 7.45% downside protection and a 6.48% assigned return rate for a 14.61% 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 VOD Jan '11 17.50 Call (VUX AW) and selling the Apr '10 22.50 call (VOD DX) for a $4.40 debit. The trade has a 162 day life and would provide 4.07% downside protection and a 13.64% assigned return rate for a 31.00% annualized return rate (for comparison purposes only). Vodafone Group has a current annual dividend yield of 5.44%. [FBB-Seven Summits Research]

Click Symbol For More News On: (VOD)