Jan 24, 2012 (Marketintelligencecenter.com via COMTEX) --
SanDisk Corp (NASDAQ: SNDK) closed Monday's trading session at $51.80. In the past year, the stock has hit a 52-week low of $32.24 and 52-week high of $53.46. SanDisk (SNDK) stock has been showing support around $50.07 and resistance in the $53.39 range. Technical indicators for the stock are Bullish and S&P gives SanDisk (SNDK) a positive 4 STARS (out of 5) buy rating. For a hedged play on SanDisk (SNDK), look at the Mar '12 $50.00 covered call for a net debit in the $47.75 area. That is also the break-even stock price for this trade. This covered call has a duration of 53 days, provides 7.82% downside protection and an assigned return rate of 4.71% for an annualized return rate of 32.45% (for comparison purposes only). A lower-cost hedged play for SanDisk (SNDK) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the SanDisk (SNDK) Jan '13 $20.00 call and selling the Mar '12 $50.00 call for a total debit of $28.35. The trade has a lifespan of 53 days and would provide 6.66% downside protection and an assigned return rate of 5.82% for an annualized return rate of 40% (for comparison purposes only). SanDisk (SNDK) has a current trailing average dividend yield of 0%.
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