Wyndham Worldwide (WYN) 11/6/09 PriceWatch Alert Down To $13.59 Break Even

Posted: Friday, November 06, 2009 8:47 AM EDT
By: Market Intelligence Center Staff

Wyndham Worldwide (NYSE: WYN) closed yesterday at $17.79. So far the stock has hit a 52-week low of $2.55 and 52-week high of $18.43. Wyndham Worldwide stock has been showing support around 16.98 and resistance in the 18.22 range. Technical indicators for the stock are Bullish and S&P gives WYN a very weak 1 STAR (out of 5) strong sell rating. WYN appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a May '10 15 covered call (WYN EC) for a net debit in the $13.59 area. That is also the break even stock price for this trade. This covered call has a 197 day duration, provides 23.61% downside protection and a 10.38% assigned return rate for a 19.22% 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 WYN Jan '11 7.50 Call (VPQ AU) and selling the May '10 15 call (WYN EC) for a $6.55 debit. The trade has a 197 day life and would provide 21.02% downside protection and a 14.50% assigned return rate for a 27.00% annualized return rate (for comparison purposes only). Wyndham Worldwide has a current annual dividend yield of 0.92%. [FBB-Seven Summits Research]