The Commerce Department released a report today stating durable good orders increased 2.5% in the last month. The increase was caused by a dramatic increase in aircraft orders during February.
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In January, durables (those goods lasting greater than 3 years) declined 9.3%. Non-defense durable goods decreased 1.2% in February following a 7.4% decline in January.
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Several economists have described the data as overall very negative. Drew Mathus, an economist for Lehman Brothers was quoted in a Market Watch article as having said, “The flow of new orders has been stunted and firms now seem to be working through the existing order book. This should make firms more reluctant to expand production and could lead to a downward spiral in capital equipment orders with all the attendant risks to growth and inflation.”
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But, the news does bode well for defense contractors and airplane manufacturers. Today, PowerOptions weblog will take a look at Boeing (BA) and the Aerospace/Defense products and service sector using the search tools found exclusively at PowerOptions.
Below is a wonderful example of you can use the tools found at the PowerOptions website to discover covered calls trades across a sector. Additionally, PowerOptions tools can be used with calendar spreads, bull call debit spreads and even bear market option trading techniques.
Potential Trades:
All of the following option trades have 53 days until expiration. These trades were discovered using the powerful suite of option search tools found at PowerOptions.
| PowerOptions covered call search Aerospace Sector (53 days) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Sym |
Stock Price |
OPTION | Strike Info |
Opt Bid |
% Dnsd. Prot. |
% If Unch. |
% If Asgnd |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| HXL | $20.00 | HXLED | 07 MAY $20.00 | $1.00 | 5.00% | 5.30% | 5.30% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| UIC | $54.97 | UICEK | 07 MAY $55.00 | $2.70 | 4.90% | 5.20% | 5.20% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BEAV | $32.29 | BQVEF | 07 MAY $30.00 | $3.40 | 10.50% | 3.80% | 3.80% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BA | $89.67 | BAER | 07 MAY $90.00 | $2.80 | 3.10% | 3.20% | 3.60% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
HXL – Hexcel Corp. manufactures advanced materials used in aerospace and defense applications. This trade involves the May $20 call option and offers 5.0% downside protection and 5.3% potential profit if the stock is above the $20 strike price at the end of the option period.
UIC – United Industrial Corp. designs and produces aerospace and defense products. This trade involves the May $55 call option and offers 4.9% downside protection and 5.2% potential profit if the stock is above the $55 strike price at the end of the option period.
BEAV – BE Aerospace inc. makes products used in commercial aircrafts (Cushions, armrests, tray tables…). This trade involves the May $30 call option and offers 10.5% downside protection and 3.8% potential profit if the stock is above the $30 strike price at the end of the option period.
BA – Boeing is the well-known commercial airplane manufacturer. This trade involves the May $90 call option and offers 3.1% downside protection and 3.6% potential profit if the stock is above the $90 strike price at the end of the option period.
Competitors:
Competitors for HXL include: BP plc (BP), Cytec Industries Inc. (CYT), Mitsubishi Rayon Company, Limited (private), and Zoltek Companies Inc. (ZOLT).
Competitors for UIC include: L-3 Communications Holdings Inc. (LLL), Northrop Grumman Corp. (NOC), Israel Aircraft Industries Ltd. (private), and EDO Corp. (EDO).
Competitors for BEAV include: Honeywell Aerospace (private), and Seton House Group Ltd. (private).
Competitors for BA include: Lockheed Martin Corp. (LMT), Northrop Grumman Corp. (NOC), Airbus S.A.S. (private), Applied Signal Tech. Inc. (APSG), Digital Angel Corp. (DOC), Orbital Sciences Corp. (ORB), Raytheon Co. (RTN), and United Techs. Corp. (UTX).
For more information about how to identify and research great option trades, visit the PowerOptions website. There you will find the data you need to make quick, clear, and informed decisions. You can trade knowing you have found the best investment. Also, PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades. PowerOptions‘ premium customer support is second to none in the industry. They can be easily contacted when you need them at their toll-free number to answer customer questions. Call them now toll free at 877-992-7971.
PowerOptions provides a free 14-day trial of its service. So join PowerOptions today, and you too can start reaping the benefits of the covered call investment strategy.
PowerOptions‘ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, naked puts and iron condor stock options strategy recommendations. PowerOptionsApplied provides a 30-day risk free trial of its service.
[tags] Commerce Department, Drew Mathus, Lehman Brothers, Mitsubishi Rayon Company, Limited, Israel Aircraft Industries Ltd., Honeywell Aerospace, Seton House Group Ltd., Airbus S.A.S., APSG, Applied Signal Tech. Inc., BA, Boeing Co., BP, British Petroleum Co., CYT, Cytec Industries Inc., DOC, Digital Angel Corp., EDO, EDO Corp., LLL, L-3 Communications Inc., LMT, Lockheed Martin Corp., NOC, Northrop Grumman Corp., ORB, Orbital Sciences Corp., RTN, Raytheon Co., UTX, United Techs. Corp., ZOLT, Zoltek Companies Inc., bull call debit spreads, calendar spreads, covered call investment strategy, investment strategy, iron condor, poweroptions, stock option trading, stock options [/tags]