Diana Shipping closed Friday's unfavorable trading session at $11.31. In the past year, the stock has hit a 52-week low of $10.75 and 52-week high of $14.44, Marketintelligencecenter reports. Diana Shipping stock has been showing support around $10.97 and resistance in the $11.67 range. Technical indicators for the stock are Bearish. For a hedged play on this stock, look at the Dec '11 $11.00 covered call for a net debit in the $10.06 area. That is also the break-even stock price for this trade. This covered call has a duration of 215 days, provides 11.05% downside protection and an assigned return rate of 9.34% for an annualized return rate of 15.86% (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 DSX Jan '12 $9.00 call and selling the Dec '11 $11.00 call for a total debit of $1.55. The trade has a lifespan of 215 days and would provide 6.72% downside protection and an assigned return rate of 29.03% for an annualized return rate of 49% (for comparison purposes only). Diana Shipping does not pay dividends at this time.
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