Rochester, NY 8/19/2009 8:39:11 AM
ACE Limited ACE , PriceWatch Alert Down To $46.54 Break Even -ACE Limited (ACE)
ACE Limited
ACE Limited (NYSE: ACE) closed yesterday at $49.29. So far the stock has hit a 52-week low of $30.92 and 52-week high of $68.00. ACE stock market has been showing support around 48.13 and resistance in the 50.85 range. Technical indicators for the stock are Bullish and S&P gives ACE a positive 4 STAR (out of 5) buy rating. ACE becomes visible on the shareholder Observer Volume Leaders list. For a hedged play on this stock, look at a Nov '09 50 covered calls (ACE KJ) for a net debit in the $46.54 area.
For this trade also the break even stock price. This covered call has 96 day duration, provides 5.58% downside protection and a 7.43% assigned return rate for a 28.27% annualized return rate (comparison purposes only). A lesser cost hedged play for this stock would use a longer period call option in place of the covered call stock purchase. To use this strategy look at going long the ACE Jan '11 30 Call (VQZ AF) and selling the Nov '09 50 call (ACE KJ) for a $17.55 debit.
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