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Potential Lumber Liquidators (LL) Trade Has 15.63% Downside Protection

Nov 28, 2017 ( via COMTEX) --

For a hedged play on Lumber Liquidators (<a href="">LL</a>) MarketIntelligenceCenter.comaEUR(TM)s patented trade-picking algorithms selected a May 18, 2018 $26 covered call for a net debit in the $23.19 area. That is also the break-even stock price for the covered call. This trade will return 12.06%, or 25.76% annualized (for comparison purposes only), in 171 days. This covered call also provides 15.63% downside protection. A lower-cost play on Lumber Liquidators would use a longer term call option in place of the long position in the stock. Look at the Jan 18, 2019 $17 call and the same sold call for a net debit of $7.95.This trade only has 9.27% downside protection, but the assigned return rate rises to 13.20% or an annualized rate of 28.19% (for comparison purposes only). The current 52-week low is $14.99 and the 52-week high is $41.33. Lumber Liquidators stock has been showing support around $26.70 and resistance in the $28.82 range. The stock closed Nov 27, 2017's trading session at $27.50.A

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