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Potential Canadian Natural Resources (CNQ) Trade Has 4.10% Downside Protection

Jan 03, 2018 (Marketintelligencecenter.com via COMTEX) --

For a hedged play on Canadian Natural Resources (<a href="http://www.marketintelligencecenter.com/symbol/CNQ">CNQ</a>) MarketIntelligenceCenter.comaEUR(TM)s algorithms selected the Feb 16, 2018 $36 covered call for a net debit in the $35.03 area. That is also the break-even stock price for the covered call. This trade will return 2.73%, or 22.72% annualized (for comparison purposes only), in 44 days. This covered call also provides 4.10% downside protection. A lower-cost play on Canadian Natural Resources would use a longer term call option in place of the long position in the stock. Look at the Jan 18, 2019 $15 call and the same sold call for a net debit of $20.35.This trade only has 3.25% downside protection, but the assigned return rate rises to A3.19% or an annualized rate of 26.49% (for comparison purposes only). The current 52-week low is $27.52 and the 52-week high is $36.79. Canadian Natural Resources stock has been showing support around $34.41 and resistance in the $37.71 range. The stock closed Jan 2, 2018's trading session at $36.54. Technical indicators for the stock are bearish and S&P gives CNQ a 5 STARS (out of 5) strong buy ranking.

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