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Barron's picks: Helmerich & Payne (HP) is well-capitalized, boasts a strong order flow, and...

Sunday, August 22, 2010, 10:48 AM ET
Barron's picks: Helmerich & Payne (HP) is well-capitalized, boasts a strong order flow, and is set to profit as exploration companies shift their focus to unconventional shale basins and newer, more cost-effective rigs. Shares could rise as high as $63 from a recent $36.

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This news story has 6 comments:

Mike Scanlin Comments (86)

This is a good covered call candidate in the short run. With stock at 36.33 you can sell the Sep 35s for 2.30 and end up with an if-called (and if-flat, since it's ITM) annualized return of 36.5%. No earnings dates before the Sept expiration. If not called you own it at a basis of 34.03 and can sell an Oct option after Sept expiration.
MikeS
www.borntosell.com
covered call investment tools

22 Aug 2010, 11:20 AM Reply Like

dealpirate Comments (3)

Why not sell the Sept 32.5 calls given the ST bearish chart for HP and the overall market?

Option volume was present at this strike last week.

Plus, the deeper call provides some protection against a falling stock price and overall market decline thru the 3rd Friday in September.

22 Aug 2010, 12:06 PM Reply Like

Mike Scanlin Comments (86)

I was referring to a covered call. The 32.50s are deeper in the money and have an if-called annualized rate of return of 15%. A bit low for my tastes (I'm seeking at least 2%/month, or 24% annualized).

23 Aug 2010, 12:41 AM Reply Like