Potential Youku.com (YOKU) Trade Has $16.40 Breakeven

Date:2011-09-15lile  Text Size:

Youku.com Inc. (NYSE: YOKU) closed Tuesday's trading session at $21.50. In the past year, the stock has hit a 52-week low of $19.78 and 52-week high of $69.95. Youku.com (YOKU) stock has been showing support around $19.58 and resistance in the $22.74 range. Technical indicators for the stock are Bearish. For a hedged play on Youku.com (YOKU), look at the Mar '12 $18.00 covered call for a net debit in the $16.40 area. That is also the break-even stock price for this trade. This covered call has a duration of 185 days, provides 23.72% downside protection and an assigned return rate of 9.76% for an annualized return rate of 19.25% (for comparison purposes only). Youku.com (YOKU) has a current trailing average dividend yield of 0%. [ATU-Seven Summits Research] 

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