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| Ann Taylor |
Ann Taylor Stores (NYSE:ANN) closed Monday's downbeat trading session at $26.03. In the past year, the stock has hit a 52-week low of $14.59 and 52-week high of $32.49. Ann Taylor Stores stock has been showing support around $24.63 and resistance in the $27.69 range. Technical indicators for the stock are Bearish and S&P gives ANN a neutral 3 STARS (out of 5) hold rating. For a hedged play on this stock, look at the Dec '11 $25.00 covered call for a net debit in the $22.13 area. That is also the break-even stock price for this trade. This covered call has a duration of 193 days, provides 14.98% downside protection and an assigned return rate of 12.97% for an annualized return rate of 24.53% (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 ANN Jan '12 $22.50 call and selling the Dec '11 $25.00 call for a total debit of $1.80. The trade has a lifespan of 193 days and would provide 6.65% downside protection and an assigned return rate of 38.89% for an annualized return rate of 74% (for comparison purposes only). Ann Taylor Stores does not pay dividends at this time.
