Mar 20, 2017 (Marketintelligencecenter.com via COMTEX) --
For a hedged play on Marathon Oil (<a href="http://www.marketintelligencecenter.com/symbol/MRO">MRO</a>) MarketIntelligenceCenter.comaEUR(TM)s algorithms selected the Oct 20, 2017 $15 covered call for a net debit in the $13.34 area. That is also the break-even stock price for the covered call. This trade will return 12.25%, or 20.92% annualized (for comparison purposes only), in 214 days. This covered call also provides 13.58% downside protection. A lower-cost play on Marathon Oil would use a longer term call option in place of the long position in the stock. Look at the Jan 19, 2018 $10 call and the same sold call for a net debit of $4.04.This trade only has 9.11% downside protection, but the assigned return rate rises to A23.44% or an annualized rate of 40% (for comparison purposes only). The current 52-week low is $9.65 and the 52-week high is $19.28. Marathon Oil stock has been showing support around $15.24 and resistance in the $15.76 range. The stock closed Mar 17, 2017's trading session at $15.46. Technical indicators for the stock are bearish and S&P gives MRO a 4 STARS (out of 5) buy ranking.
(C) Copyright 2017, Marketintelligencecenter.com. All rights reserved.