Xilinx (XLNX) NewsBite

Xilinx (NasdaqNM: XLNX) closed yesterday at $25.25. So far the stock has hit a 52-week low of $18.87 and 52-week high of $29.00. Xilinx stock has been showing support around 24.60 and resistance in the 26.06 range. Technical indicators for the stock are Bearish and S&P gives XLNX a neutral 3 STAR (out of 5) hold rating. For a hedged play on this stock, look at a Dec '08 25 covered call (XLQ LE) for a net debit in the $22.55 area. That is also the break even stock price for this trade. This covered call has a 172 day duration, provides 10.69% downside protection and a 10.86% assigned return rate for a 23.06% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the XLNX Jan '09 22.50 Call (VXJ AX) and selling the Dec '08 25 call (XLQ LE) for a $1.75 debit. The trade has a 172 day life and would provide 3.96% downside protection and a 42.86% assigned return rate for a 91.00% annualized return rate (for comparison purposes only). Xilinx has a current annual dividend yield of 2.20%.

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Related terms: S&P, trade, yield