Diana Shipping (DSX) 11/18/09 PriceWatch Alert Up To 15.31% Return

Posted: Wednesday, November 18, 2009 8:16 AM EDT
By: Market Intelligence Center Staff

Diana Shipping (NYSE: DSX) closed yesterday at $17.17. So far the stock has hit a 52-week low of $6.85 and 52-week high of $19.00. Diana Shipping stock has been showing support around 16.41 and resistance in the 17.59 range. Technical indicators for the stock are Bullish. DSX appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Jun '10 15 covered call (DSX FC) for a net debit in the $13.77 area. That is also the break even stock price for this trade. This covered call has a 213 day duration, provides 19.80% downside protection and an 8.93% assigned return rate for a 15.31% 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 DSX Jan '11 7.50 Call (XDJ AU) and selling the Jun '10 15 call (DSX FC) for a $6.60 debit. The trade has a 213 day life and would provide 17.88% downside protection and a 13.64% assigned return rate for a 23.00% annualized return rate (for comparison purposes only). Diana Shipping has a current annual dividend yield of 5.83%. [WBA-Seven Summits Research]