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Potential Walgreens Boots Alliance (WBA) Trade Could Hit 3.78% Return

Dec 07, 2017 (Marketintelligencecenter.com via COMTEX) --

MarketIntelligenceCenter.com's patented algorithms have identified an attractive covered-call trade on Walgreens Boots Alliance (<a href="http://www.marketintelligencecenter.com/symbol/WBA">WBA</a>). Look at the Jan 19, 2018 $70 covered call for a net debit in the $67.45 area.<br /> <br /> This trade has a duration of 43 days. The break-even point of this trade is the same as the net debit, which gives this trade 5.06% downside protection. If the stock closes at or above $70 at expiration this trade will return 3.78% or 32.09% annually (for comparison purposes only). <br /> <br /> If you're interested in a lower-cost hedged trade on Walgreens Boots Alliance, consider buying the Jan 18, 2019 $40 call and selling the Jan 19, 2018 $70 call for a net debit of $28.99. A<br /> <br /> This hedged trade uses a longer-term bought call instead of the long stock position in a traditional covered call. The hedged trade lasts 43 days and would provide 2.88% downside protection. If Walgreens Boots Alliance is at or above $70 when the market closes in Jan 19, 2018, this trade will make a full return of 3.44% of the initial capital at risk for an annualized return rate of 29.27% (for comparison purposes only).<br /> <br /> WBA closed Dec 6, 2017's trading session at $71.05. In the past year, the stock has hit a 52-week low of $63.82 and 52-week high of $88. Walgreens Boots Alliance stock has been showing support around $69.28 and resistance in the $72.17 range. Technical indicators for the stock are bearish and S&P gives WBA 4 STARS (out of 5) buy ranking.

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