Century Aluminum (CENX) Trading Near $17.59 Support Level

Century Aluminum (NASDAQ: CENX) closed Friday's trading session at $18.34. In the past year, the stock has hit a 52-week low of $8.25 and 52-week high of $20.76. Century Aluminum stock has been showing support around $17.59 and resistance in the $18.75 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 $13.49 area. That is also the break-even stock price for this trade. This covered call has a duration of 278 days, provides 26.44% downside protection and an assigned return rate of 11.19% for an annualized return rate of 14.70% (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 $1.90. The trade has a lifespan of 278 days and would provide 21.48% downside protection and an assigned return rate of 31.58% for an annualized return rate of 41% (for comparison purposes only). Century Aluminum does not pay dividends at this time.