MC:Potential First Majestic Silver (AG) Trade Has 35.88% Downside Protection
First Majestic Silver (NYSE:AG) closed Wednesday's seesaw trading session at $17.56. In the past year, the stock has hit a 52-week low of $3.48 and 52-week high of $26.88. First Majestic Silver stock has been showing support around $16.85 and resistance in the $18.73 range. Technical indicators for the stock are Bearish. For a hedged play on this stock, look at the Jan '12 $12.50 covered call for a net debit in the $11.26 area. That is also the break-even stock price for this trade. This covered call has a duration of 226 days, provides 35.88% downside protection and an assigned return rate of 11.01% for an annualized return rate of 17.79% (for comparison purposes only). First Majestic Silver does not pay dividends at this time. [FBB-Seven Summits Research]
