InterDigital Communications (IDCC) Showing Bullish Technicals With Support At $44.66
Jul 05, 2011 (Fresh Brewed Media via COMTEX) --
InterDigital Communications (NASDAQ:IDCC) closed Friday's winning trading session at $46.87. In the past year, the stock has hit a 52-week low of $23.73 and 52-week high of $58.64. InterDigital Communications (IDCC) stock has been showing support around $44.66 and resistance in the $48.84 range. Technical indicators for the stock are Bullish. For a hedged play on InterDigital Communications (IDCC), look at the Sep '11 $44.00 covered call for a net debit in the $40.77 area. That is also the break-even stock price for this trade. This covered call has a duration of 74 days, provides 13.01% downside protection and an assigned return rate of 7.92% for an annualized return rate of 39.08% (for comparison purposes only). A lower-cost hedged play for InterDigital Communications (IDCC) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the InterDigital Communications (IDCC) Jan '13 $20.00 call and selling the Sep '11 $44.00 call for a total debit of $22.35. The trade has a lifespan of 74 days and would provide 9.64% downside protection and an assigned return rate of 7.38% for an annualized return rate of 36% (for comparison purposes only). InterDigital Communications (IDCC) has a current annual dividend yield of 0.99%.
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