Aluminum Corp of China （NYSE: ACH） closed Wednesday's trading session at $22.77. In the past year, the stock has hit a 52-week low of $18.03 and 52-week high of $34.27.
Aluminum Corporation of China stock has been showing support around $22.42 and resistance in the $23.08 range. Technical indicators for the stock are Bearish. For a hedged play on this stock, look at the May '11 $22.00 covered call for a net debit in the $20.12 area.
That is also the break-even stock price for this trade. This covered call has a duration of 170 days, provides 11.64% downside protection and an assigned return rate of 9.34% for an annualized return rate of 20.06% （for 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 ACH Jan '12 $10.00 call and selling the May '11 $22.00 call for a total debit of $11.35. The trade has a lifespan of 170 days and would provide 6.24% downside protection and an assigned return rate of 5.73% for an annualized return rate of 12% （for comparison purposes only）. Aluminum Corporation of China does not pay dividends at this time.
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