Stock Option Investment Advice

Wachovia to acquire A.G. Edwards – Financial Sector Covered Calls

Wachovia Corporation (WB) will acquire the A.G. Edwards Inc. (AGE) brokerage in a deal set for execution later this year. The merger will create the nation’s second largest brokerage after Merrill Lynch (MER). The overall cash and stock value of the deal is estimated at $6.8 billion.

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As the second largest retail brokerage in the U.S., the new company will have $1.1 trillion in client assets and a network of nearly 15,000 financial advisors throughout the nation.

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This acquisition follows several other high-profile acquisitions by the Charlotte, N.C.-based Wachovia including First Union, Prudential Securities and Golden West Financial.

“The long-term growth opportunities of the brokerage industry are extremely compelling to Wachovia, and we have long expressed our interest in growing this business both organically and through acquisition. This combination with A.G. Edwards, which is widely considered one of the most highly regarded remaining independent brokerage firms in the industry, will further enhance our scale and relevance.” said Ken Thompson, Wachovia’s chairman and chief executive, in a statement.

Wachovia Goes Green:
HSBC (HBC) announced its plans yesterday to spend $100 million on “green” initiatives in the next five years. Wachovia, not to be outdone by the announcement, stated it would build only “green” financial centers by the end of 2008.

The AP reported the bank would build at least 300 “green” branches as it expands into California and other markets. A green branch will earn the moniker by changing to more efficient lighting, low-flow toilets, bike racks and premier parking for low emission vehicles.

The AP also reported Mark LaLiberte, president of Building Knowledge Inc., a green-building consulting firm, as saying, “Green building isn’t about using bamboo floors and wearing Birkenstocks, It’s about really smart business.”

This PowerOptions blog shows how the average investor might use our search tools based on their view of whether a stock will rise or fall. Whatever your personal opinion about the movement of an individual stock, PowerOptions can help you identify the most attractive trade. If your view is bullish, you might choose to use a covered call investment strategy, bull call debit spreads or bull-put credit spreads to make money off your hunch. Conversely, if you believe a stock will fall, you might choose bear put debit spreads or bear-call credit spreads. Sign up now and try out our search engine risk-free for 14 days.

Potential Trades: All of the following option trades have 52 days until expiration. These trades were discovered using the powerful suite of option search tools found at PowerOptions.

PowerOptions covered call Wachovia (52 days)
WB $54.55 WBGK 07 JUL $55.00 $2.90 2.20% 2.20% 3.10%
AGE $77.15 AGEGP 07 JUL $80.00 $1.20 1.60% 1.60% 5.30%
AMTD $19.75 TQAHD 07 JUL $20.00 $1.05 6.60% 7.00% 8.40%
(For more details click the ticker symbol above)

WB – The Wachovia trade involves the July $55 call option and offers 2.2% downside protection and 3.1% potential profit if the stock is above the $55 strike price at the end of the option period.

Competitors for WB include: Bank of America Corp. (BAC), Citigroup Inc. (C), and SunTrust Banks Inc. (STI).
AGE – The A.G. Edwards trade involves the July $80 call option and offers 1.6% downside protection and 5.3% potential profit if the stock is above the $80 strike price at the end of the option period.

Competitors for AGE include: Merrill Lynch & Co. Inc. (MER), The Jones Financial Companies, L.L.L.P. (private), and UBS Financial Services Inc. (private).
AMTD – The Ameritrade trade involves the July $20 call option and offers 6.6% downside protection and 8.4% potential profit if the stock is above the $20 strike price at the end of the option period.

Competitors for AMTD include: Charles Schwab Corp. (SCHW), E*TRADE Financial Corp. (ETFC), and FMR Corp. (private).
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] First Union, Prudential Securities, Golden West Financial, AP, California, Mark LaLiberte, Building Knowledge, The Jones Financial Companies, L.L.L.P., UBS Financial Services Inc., FMR Corp., AGE, Edwards (A.G.) & Sons Inc., BAC, BankAmerica Corp., C, Citigroup Inc., DE, Deere & Co., ETFC, E*Trade Financial Corp., HBC, HSBC Hldgs. PLC, MER, Merrill Lynch & Co. Inc., SCHW, Charles Schwab Inc., STI, Sun Trust Banks Inc., WB, Wachovia Corp., bear put debit spreads, bear-call credit spreads, bull call debit spreads, bull-put credit spreads, covered call investment strategy, investment strategy, iron condor, poweroptions, stock option trading, stock options [/tags]

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