Intrepid Potash (IPI)

[CHA$E]

In the past year, IPI.....

.... the stock has hit a 52-week low of $24.16 and 52-week high of $40.22. Intrepid Potash (IPI) stock has been showing support around $32.52 and resistance in the $36.46 range. Technical indicators for the stock are Bullish. For a hedged play on Intrepid Potash (IPI), look at the Dec '11 $33.00 covered call for a net debit in the $30.33 area. That is also the break-even stock price for this trade. This covered call has a duration of 99 days, provides 11.13% downside protection and an assigned return rate of 8.80% for an annualized return rate of 32.46% (for comparison purposes only). A lower-cost hedged play for Intrepid Potash (IPI) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the Intrepid Potash (IPI) Jan '13 $17.50 call and selling the Dec '11 $33.00 call for a total debit of $14.90. The trade has a lifespan of 99 days and would provide 5.07% downside protection and an assigned return rate of 4.03% for an annualized return rate of 15% (for comparison purposes only). Intrepid Potash (IPI) has a current trailing average dividend yield of 0%. [THA-Seven Summits Research]

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