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Brent Archer Return Risk -61.60% MID Tracked Blogger Profile & Performance Subscribe to author

Symbol Sentiment Start Return Closed UST n/a MO n/a IRM n/a Via BloggingStocks:   Filed under: Major movement, Options, Technical Analysis, S and P 500 Iron Mountain (NYSE: IRM - option chain) shares have moved higher today after the stock was added to the Standard & Poor's S&P 500 index. IRM is replacing UST Inc. (NYSE: UST), which was bought out by Altria Group (NYSE: MO). This usually causes a surge in stock value as all the ETFs that track the S&P 500 now have to rush to add IRM positions. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on IRM. IRM opened this morning at $21.45. As of this writing, the stock has hit a low of $21.40 and a high of $37.24. As of 12:45, IRM is trading at $22.99, up $3.16 (15.9%). The chart for IRM looks neutral and S&P gives IRM a 3 STARS (out of 5) hold ranking. For a bullish hedged play on this stock, I would consider an April bull-put credit spread below the $15 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in just four months as long as IRM is above $15 at April expiration. Iron Mountain would have to fall by more than 34% before we would start to lose money. IRM hasn't been below $16 at all in the past year and has shown support around $19.50 recently. Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in IRM. Iron Mountain (IRM) added to S&P 500 originally appeared on BloggingStocks on Tue, 30 Dec 2008 16:45:00 EST. Please see our terms for use of feeds. Read | Permalink | Email this | Comments   Read the rest of original post »

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