Mobile Telesystems OJSC (MBT) 11/16/09 PriceWatch Alert At $44.18 Break Even

Posted: Monday, November 16, 2009 8:34 AM EDT
By: Market Intelligence Center Staff

Mobile Telesystems OJSC (NYSE: MBT) ended the last trading session at $50.18. So far the stock has hit a 52-week low of $18.36 and 52-week high of $55.71. Mobile Telesystems OJSC stock has been showing support around 49.25 and resistance in the 51.49 range. Technical indicators for the stock are Bullish and S&P gives MBT a neutral 3 STAR (out of 5) hold rating. MBT appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Mar '10 50 covered call (MBT CJ) for a net debit in the $44.18 area. That is also the break even stock price for this trade. This covered call has a 124 day duration, provides 11.96% downside protection and a 13.17% assigned return rate for a 38.78% 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 MBT Jan '11 25 Call (OVD AE) and selling the Mar '10 50 call (MBT CJ) for a $20.50 debit. The trade has a 124 day life and would provide 9.33% downside protection and a 21.95% assigned return rate for a 65.00% annualized return rate (for comparison purposes only). Mobile Telesystems OJSC has a current annual dividend yield of 5.42%. [ABR-Seven Summits Research]