Teva Pharmaceutical Industries Ltd (NASDAQ: TEVA) closed Friday's trading session at $50.69. In the past year, the stock has hit a 52-week low of $46.99 and 52-week high of $64.95. Teva Pharmaceutical stock has been showing support around $49.78 and resistance in the $51.46 range. Technical indicators for the stock are Bearish and S&P gives TEVA a positive 4 STARS (out of 5) buy rating. For a hedged play on this stock, look at the Jan '11 $52.50 covered call for a net debit in the $49.80 area. That is also the break-even stock price for this trade. This covered call has a duration of 54 days, provides 1.76% downside protection and an assigned return rate of 5.42% for an annualized return rate of 36.65% (for 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 TEVA Jan '12 $35.00 call and selling the Jan '11 $52.50 call for a total debit of $15.56. The trade has a lifespan of 54 days and would provide 0.26% downside protection and an assigned return rate of 12.47% for an annualized return rate of 84% (for comparison purposes only). Teva Pharmaceutical has a current annual dividend yield of 1.40%
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