Consider This Covered Call 12/17/2013
United Rentals (NYSE: URI) ended the last trading session at $42.28. So far the stock has hit a 52-week low of $26.00 and 52-week high of $47.98. URI has had an S&P 5 STARS (out of 5) ranking since 11/4/2010. On 11/6/2012 S&P equity analysts set a 12-Month price target of $60.00 for the stock. United Rentals stock has been showing support around $41.63 and resistance in the $43.01 range. URI is part of the S&P 5 STARS stock list. For a hedged play on this stock, consider a Mar '13 covered call with a 42 sold call for a net debit in the $38.28 area. The strategy has an 89 day duration, provides 9.46% downside protection and a 9.72% assigned return rate for a 39.85% annualized return rate (for comparison purposes only).
This strategy has a 4 Key (out of 5) Low Relative Risk ranking. Stock Symbol URIStock Price $42.28. Sell the March 2013 strike of $42.00 at the bid price of $4.00. This could portentially yield a 9.72% return if URI stock stays above $42 a share through expiration 89 days from now. This strategy has a low relative risk, which means there is a possibility that the stock will be assigned on or before 3/16/2013 - expirationday - and that the strategy will be closed at the profit level shown.