Stock Option Advisory

Wireless Market: Google May Enter Cell Phone Market and Verizon Reports Profits

Earlier in the year the CEO of AT&T (T), Edward Whitacre, made remarks about how Google was getting a free ride on the network his company created and should be made to pay higher usage fees. Google (GOOG) was predictably troubled by the comments, since under their current operational model AT&T could do a number of things to disrupt their service and profitability.

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The tactic Google appears to be taking to remove it’s vulnerabilities to AT&T’s service is an interesting one. They are planning to participate in the upcoming auction for the 700-MHz radio spectrum currently used by analog television. Google CEO Eric Schmidt sent a letter to FCC Chairman Kevin Martin saying the company will commit $4.6 billion to the auction.

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Now couple this news with the recent deal between Sprint (S) and Google and there may be a wider trend emerging. In a recent article, the AP characterized the deal like this, ” Sprint announced it is working with Google Inc. to bring WiMAX mobile Internet customers search, interactive communications and social networking tools though a new mobile portal.”

If Google gets the 700-MHz spectrum will WiFi be as ubiquitous as conventional television is now? Will you finally be able to get a cell signal in your parking garage’s elevator? Well if the answer to those questions is yes, we may not find out for a while because there appears to be considerable groundwork to be done before TV stations are removed and some new service is provided on the bandwidth.

Verizon Posts Profit:
Verizon Communications (VZ) reported a 4.5% increase in second quarter income on Monday. Experts believe the news was fueled by wireless and broadband growth. The company also made an announcement stating they will be buying Rural Cellular Corp. (RCCC), a company delivering service to 700,000 customers in smaller markets, for $2.67 billion in cash and assumed debt.

Verizon has been relying lately on its wireless division to offset a decline in its traditional phone business. News reports stated the company added 1.3 million wireless customers during the quarter.

Verizon has also been expanding its fiber-optic network to tap into growth in Internet traffic and has plans to offer an on-demand television service. In the quarter, Verizon gained 288,000 broadband customers and 167,000 fiber-TV subscribers.

Looking at this news from an option trading perspective:
Google, Sprint and Verizon all seemed poised for long-term market share and profit growth. This may make them good candidates for a covered call trading strategy. Now, let’s turn to the PowerOptions search engine and see what kind of trades it returns.

It should be noted, finding the right option trade can be difficult for investors if they don’t have a solid search tool to help them. Option data and information is often cumbersome and difficult to find. PowerOptions‘ award winning search tools are exactly what an options investor requires to find desirable trades. Call PowerOptions at 877-992-7971 to start your free trial.

Potential Trades:
All of the following option trades have 54 days until expiration. These trades were discovered using the powerful suite of option search tools found at PowerOptions.

Covered Call Search
Symbol Stock
Google Inc. GOOG 516.11 GOPIV 07 SEP 520.0 (54) 19.1 3.7 3.8 4.6
AT&T Corp. T 39.77 TIH 07 SEP 40.0 (54) 1.4 3.5 3.6 4.2
Google Inc. GOOG 516.11 GOPIU 07 SEP 510.0 (54) 24.5 4.7 3.7 3.7
Sprint Nextel Corp. S 20.93 SID 07 SEP 20.0 (54) 1.6 7.6 3.5 3.5
Google Inc. GOOG 516.11 GOPIO 07 SEP 500.0 (54) 31 6 3.1 3.1
Verizon Wireless VZ 41.51 VZIV 07 SEP 42.5 (54) 1.15 2.8 2.8 5.3
(For more details click the ticker symbol above)

These trades offer between 2.8 and 7.6% downside protection and between 3.1 and 5.3% potential profit.

Competitors for GOOG include: Yahoo! Inc. (YHOO), IAC Search & Media, Inc. (private), MSN (private), Convera Corp. (CNVR), DivX Inc. (DIVX), eBay Inc. (EBAY), Infospace Inc. (INSP), Marchex Inc. (MCHX), MIVA Inc. (MIVA), Microsoft Corp. (MSFT), and Travelzoo Inc. (TZOO).
Competitors for T include: Qwest Communications International Inc. (Q), Sprint Nextel Corp. (S), Verizon Communications Inc. (VZ), BellSouth Corp. (BLS), Broadwing Corp. (BWNG), Cincinnati Bell Inc. (CBB), Cbeyond Inc. (CBEY), CenturyTel Inc. (CTL), Citizens Utilities Co. (CZN), Earthlink Inc. (ELNK), Embarq Corp. (EQ), Equinix Inc. (EQIX), Fairpoint Comms. Inc. (FRP), FiberTower Corp. (FTWR), Global Crossing Ltd. (GLBC), Internap Network Services Corp. (INAP), IPass Inc. (IPAS), Iowa Telecom. Svs. Inc. (IWA), Level 3 Comm. Inc. (LVLT), Talk America Hldgs. Inc. (TALK), Telephone & Data Systems Inc. (TDS), TNS Inc. (TNS), Time Warner Telecom Inc. (TWTC), and Windstream Corp. (WIN).
Competitors for S include: AT&T Mobility LLC (private), Cellco Partnership (private), T-Mobile USA, Inc. (private), ALLTEL Corp. (AT), Broadwing Corp. (BWNG), Cincinnati Bell Inc. (CBB), US LEC Corp. (CLEC), Dobson Comms. Corp. (DCEL), Leap Wireless Intl. Inc. (LEAP), Philippine Long Dist. Tele. Co. (PHI), Qwest Comm. Intl. (Q), AT&T Corp. (T), United States Cellular Corp. (USM), and Verizon Wireless (VZ).
Competitors for VZ include: AT&T Inc. (T), Qwest Communications International Inc. (Q), Sprint Nextel Corp. (S), Broadwing Corp. (BWNG), Cincinnati Bell Inc. (CBB), US LEC Corp. (CLEC), Commonwealth Telephone Entpr. Inc. (CTCO), Citizens Utilities Co. (CZN), Embarq Corp. (EQ), FiberTower Corp. (FTWR), Global Crossing Ltd. (GLBC), Internap Network Services Corp. (INAP), IPass Inc. (IPAS), RCN Corp. (RCNI), Talk America Hldgs. Inc. (TALK), Telephone & Data Systems Inc. (TDS), TNS Inc. (TNS), Time Warner Telecom Inc. (TWTC), and Windstream Corp. (WIN).
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] Edward Whitacre, Eric Schmidt, AP, WiFi, IAC Search & Media, Inc., MSN, AT&T Mobility LLC, Cellco Partnership, T-Mobile USA, Inc., AT, ALLTEL Corp., CBB, Cincinnati Bell Inc., CBEY, Cbeyond Inc., CNVR, Convera Corp., CTL, CenturyTel Inc., CZN, Citizens Utilities Co., DCEL, Dobson Comms. Corp., DIVX, DivX Inc., EBAY, eBay Inc., ELNK, Earthlink Inc., EQ, Embarq Corp., EQIX, Equinix Inc., FRP, Fairpoint Comms. Inc., FTWR, FiberTower Corp., GLBC, Global Crossing Ltd., GOOG, Google Inc., INAP, Internap Network Services Corp., INSP, Infospace Inc., IPAS, IPass Inc., IWA, Iowa Telecom. Svs. Inc., LEAP, Leap Wireless Intl. Inc., LVLT, Level 3 Comm. Inc., MCHX, Marchex Inc., MIVA, MIVA Inc., MSFT, Microsoft Corp., PHI, Philippine Long Dist. Tele. Co., Q, Qwest Comm. Intl., RCCC, Rural Cellular Corp., RCNI, RCN Corp., S, Sprint Nextel Corp., T, AT&T Corp., TDS, Telephone & Data Systems Inc., TNS, TNS Inc., TWTC, Time Warner Telecom Inc., TZOO, Travelzoo Inc., USM, United States Cellular Corp., VZ, Verizon Wireless, WIN, Windstream Corp., YHOO, Yahoo Inc., covered call investment strategy, investment strategy, iron condor, poweroptions, stock option trading, stock options [/tags]

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