Hartford Financial (HIG) 11/10/09 PriceWatch Alert At $18.39 Break Even

Posted: Tuesday, November 10, 2009 8:16 AM EDT
By: Market Intelligence Center Staff

Hartford Financial (NYSE: HIG) closed yesterday at $25.34. 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 23.88 and resistance in the 26.18 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 Mar '10 20 covered call (HIG CU) for a net debit in the $18.39 area. That is also the break even stock price for this trade. This covered call has a 130 day duration, provides 27.43% downside protection and an 8.75% assigned return rate for a 24.58% 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 Mar '10 20 call (HIG CU) for a $13.55 debit. The trade has a 130 day life and would provide 26.80% downside protection and a 10.70% assigned return rate for a 30.00% annualized return rate (for comparison purposes only). Hartford Financial has a current annual dividend yield of 0.83%. [ATU-Seven Summits Research]