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Free Covered Call Trade on Yahoo (YHOO)

Covered Call Recommendation on Yahoo (YHOO)

STRATEGY:

Look at the November 2011 14 covered call.  For each 100 shares of Yahoo (YHOO) stock you buy, sell one November 2011 14 covered call option for a $12.30
(13.50 – 1.20) debit or better.  This is potentially a 13.8% assigned return.  Yahoo does not pay a dividend.

Blanket Put:  If you are looking for a blanket put for protection, look to buy the Apr 2012 13 Put for $2.00.  You will sell the Blanket Put when the covered call position is closed.
RISK  The technicals for YHOO are bullish with a weak downward trend.  The stock is under accumulation with support at 11.29. S&P rates this stock 4 STARS (out of five) – buy.

S&P research notes:

S&P reiterates Buy opinion on shares of Yahoo (YHOO) .  According to unconfirmed reports from Bloomberg and others, at a scheduled talk and Q&A session held late last week at Stanford University’s graduate business school, Jack Ma, the founder, Chairman and CEO of Alibaba Group, expressed an interest in buying YHOO. He referenced discussions with the company and other interested parties. We think that YHOO is considering strategic alternatives, and believe its 43% stake in Alibaba is perhaps its most valuable single asset.  Ma and Alibaba have been interested in repurchasing all or some of YHOO’s stake for some time.

Free Covered Call Trade on Yahoo

Covered Call Recommendation on Yahoo!

STRATEGY:

Look at the January 12.50 covered call. For each 100 shares of Yahoo (YHOO) stock you buy, sell one January 12.50 covered call option for an 11.25 (13.38 – 2.13) debit or better. That’s potentially an 11.1% assigned return.  The technicals for YHOO are bullish with a weak downward trend. The stock is under accumulation with support at 12.45. S&P rates this stock 4 STARS (out of five) – buy.

S&P reiterates buy opinion on shares of Yahoo (YHOO) . YHOO announces Carol Bartz has been relieved of her CEO duties. CFO Tim Morse continues in his current role and has been appointed interim CEO. The board is engaging an executive search firm to help identify CEO candidates. We are not surprised by this news. Bartz became CEO inJanuary 2009 and was widely criticized for not turning YHOO around. She worked to refocus YHOO, which is now being positioned as the “premier digital a media company,” but was being run by a combative long-time technology executive. We think this change makes sense and should be a positive for the stock.
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