Century Aluminum (NASDAQ:CENX) closed Friday's favorable trading session at $17.13. In the past year, the stock has hit a 52-week low of $8.25 and 52-week high of $17.71. Century Aluminum stock has been showing support around $15.81 and resistance in the $17.91 range.
Technical indicators for the stock are Bullish. For a hedged play on this stock, look at the Jan '12 $15.00 covered call for a net debit in the $12.98 area. That is also the break-even stock price for this trade. This covered call has a duration of 313 days, provides 24.23% downside protection and an assigned return rate of 15.56% for an annualized return rate of 18.15% (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 CENX Jan '12 $12.50 call and selling the Jan '12 $15.00 call for a total debit of $1.70. The trade has a lifespan of 313 days and would provide 17.10% downside protection and an assigned return rate of 47.06% for an annualized return rate of 55%
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