Rochester, NY 8/11/2009 10:58:03 AM
After Hours - Potash Corp., POT - Potash Corp. Could Hit 31.24% Return
Potash Corporation of Saskatchewan Inc.
Potash gained $99.56 at close market. So far Potash stock has hit a 52-week low of $47.54 and 52-week high of $186.44. It has also been showing support around 94.56 and resistance in the 103.14 range. Technical indicators for the stock are Bullish and S&P gives POT a weak 2 STAR (out of 5) sell rating.
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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 POT Jan '11 45 Call and selling the Dec '09 95 call for a $42.70 debit. The trade has a 135 day life and would provide 11.91% downside protection and a 17.10% assigned return rate for a 46.00% annualized return rate (for comparison purposes only). Potash has a current annual dividend yield of 0.42%.
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