Potential Hewlett Packard (HPQ) Trade Has 5.89% Downside Protection
Dec 07, 2017 (Marketintelligencecenter.com via COMTEX News Network) -- For a hedged play on Hewlett Packard (HPQ) MarketIntelligenceCenter.comaEUR(TM)s patented trade-picking algorithms selected a May 18, 2018 $21 covered call for a net debit in the $19.78 area. That is also the break-even stock price for the covered call. This trade will return 6.16%, or 13.89% annualized (for comparison purposes only), in 162 days. This covered call also provides 5.89% downside protection. A lower-cost play on Hewlett Packard would use a longer term call option in place of the long position in the stock. Look at the Jan 18, 2019 $15 call and the same sold call for a net debit of $5.16.This trade only has 4.09% downside protection, but the assigned return rate rises to 16.27% or an annualized rate of 36.67% (for comparison purposes only). The current 52-week low is $14.40 and the 52-week high is $22.68. Hewlett Packard stock has been showing support around $20.75 and resistance in the $21.29 range. The stock closed Dec 6, 2017's trading session at $21.02.A
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