"Lehman Brothers (NYSE: LEH) ended the last trading session at $63.47. So far the stock has hit a 52-week low of $49.06 and 52-week high of $86.18. Lehman Brothers stock has been showing support around 60.86 and resistance in the 66.16 range. Technical indicators for the stock are Bullish and S&P gives LEH a weak 2 STAR (out of 5) sell rating. For a hedged play on this stock, look at an Apr '08 60 covered call (LES DL) for a net debit in the $53.97 area. That is also the break even stock price for this trade. This covered call has a 131 day duration, provides 14.97% downside protection and an 11.17% assigned return rate for a 31.13% 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 LEH Jan '09 25 Call (VHE AE) and selling the Apr '08 60 call (LES DL) for a $30.55 debit. The trade has a 131 day life and would provide 12.48% downside protection and a 14.57% assigned return rate for a 41.00% annualized return rate (for comparison purposes only). Lehman Brothers has a current annual dividend yield of 1.00%."
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