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Broadcom (NASDAQ: BRCM - option chain) shares are moving higher today after an article in Barron's over the weekend said the stock could rise as much as 40 percent as the chipmaker enters the market for smartphones. 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 BRCM.

BRCM opened this morning at $28.23. So far today the stock has hit a low of $27.76 and a high of $28.39. As of 12:20, BRCM is trading at $27.86, up 40 cents(1.5%). The chart for BRCM looks bullish and S&P gives BRCM a positive 4 STARS (out of 5) buy ranking.

For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $20 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 a 13.6% return in just three months as long as BRCM is above $20 at November expiration. Broadcom would have to fall by more than 27% before we would start to lose money. Learn more about this type of trade here.

BRCM hasn't been below $20 since April and has shown support around $23 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in BRCM.

SunPower (NASDAQ: SPWR - option chain) shares are soaring higher today after Pacific Gas and Electric Co. said it has chosen SPWR to supply up to 800 megawatts of renewable energy. On the news, an analyst at Merrill Lynch also upgraded SPWR to "Buy" from "Hold." 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 SPWR.

SPWR opened this morning at $87.64. So far today the stock has hit a low of $87.57 and a high of $93.93. As of 12:55, SPWR is trading at $93.26, up $14.69 (18.7%). The chart for SPWR looks neutral and S&P gives SPWR a 3 STARS (out of 5) hold ranking.

For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $55 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 willstill leverage nice returns. For this particular trade, we will make an 11.1% return in just four months as long as SPWR is above $55 at December expiration. Sunpower would have to fall by more than 40% before we would start to lose money. Learn more about this type of trade here.

SPWR hasn't been below $55 since March and has shown support around $71 recently. With the way the political climate is shaping up, it looks like some form of solar power should be here for quite a while.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in SPWR.

LDK Solar Company (NYSE: LDK) is a leading manufacturer of the multicrystalline solar wafers used to produce solar cells and modules. The firm provides its wafers, as well as wafer processing services, to major manufacturers of photovoltaic products. More than two-thirds of its revenues derive from sales to companies in the Asia/Pacific region, primarily China and Taiwan.

The company pleased investors on Monday, when it reported Q2 EPS of $1.29 and revenues of $441.7 million. Analysts had been expecting 42 cents and $282 million. Management also guided Q3 revenues to $486-$496 million ($307.05M consensus) and FY08 revenues to $1.65-$1.75 billion ($1.16B consensus). The CEO noted that the firm had signed nine long-term wafer supply agreements year-to-date, further diversifying its customer base. On Wednesday, he announced yet another such agreement, with India-based XL Telecom & Energy.

Dr. Pepper Snapple Group (NYSE: DPS - option chain) shares are flying higher today after the company reported this morning earnings that beat expectations by 5 cents and set its full-year forecast about 3 cents higher than previous analyst estimates. Even if consumers are spending less, it seems that charging $1.50 for two liters of soda that cost only a few cents to produce is still a good business model. 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 DPS.

DPS opened this morning at $22.21. So far today the stock has hit a low of $22.12 and a high of $23.77. As of 12:45, DPS is trading at $22.94, up $1.28 (5.9%). The chart for DPS looks neutral, but improving.

For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $20 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 a 16.3% return in just three and a half months as long as DPS is above $20 at November expiration. DPS would have to fall by more than 12% before we would start to lose money. Learn more about this type of trade here.

Archer-Daniels Midland (NYSE: ADM - option chain) shares are rising today after the Department of Agriculture lifted its corn production estimates and lowered its corn price estimates. The news is good for ADM since the company is a huge consumer of corn. 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 ADM.

ADM opened this morning at $26.34. So far today the stock has hit a low of $26.04 and a high of $27.25. As of 12:30, ADM is trading at $27.09, up $0.75 (2.8%). The chart for ADM looks bullish and S&P gives ADM a positive 4 STARS (out of 5) buy ranking.

For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $22.50 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 a 22.0% return in just four months as long as HANS is above $22.50 at September expiration. ADM would have to fall by more than 16% before we would start to lose money. Learn more about this type of trade here.

In this market and this economy, you take the good news where you can get it.

Today, we got some good news: the U.S. trade deficit narrowed in June to $56.8 billion on record exports and a dip in non-oil imports, the U.S. Commerce Department announced Tuesday. Economists surveyed by Bloomberg News had expected the June trade gap to be $61.5 billion.

Exports surged 4% in June to a record $164.4 billion, the largest gain in four years. Imports increased 1.8% to a record $221.2 billion, inflated by sky-high oil prices. Oil, which traded at about $113.65 per barrel on Tuesday at mid-day, is up about 360% since 2003.

U.S. export activity has been a silver lining in the nation's otherwise anemic economy. The trade deficit has been declining for about two years, aided by a weaker dollar and demand for products in emerging market countries.

A stronger U.S. economy in Q2?

Economist David H. Wang told BloggingStocks Tuesday the June trade deficit statistic "was a really pleasant surprise," but he still wants to lower expectations.

"The high export number is the standout, and it's one that, if it continues, implies a higher rate of GDP growth for the U.S. economy in Q2, but let's not jump the gun. Economists sense there's a global economic slowing going on, exports may have peaked as a result, so this large increase in June may prove to be transitory," Wang said.

For U.S. consumers, there's good news and bad news on the gasoline price front.

First the good news: U.S. retail gasoline prices have fallen every day for about a month, CNNMoney.com reported Monday, citing motorist group AAA data.

Now the bad news: Prices are not falling nearly as fast - - or as proportionately - - as they rose, given the same dollar-move in a barrel of oil.

The AAA said the national, average price for a gallon of regular unleaded has fallen 30 cents to $3.81 from a record high of $4.11 set on July 16, 2008, CNNMoney.com reported Monday.

Gasoline prices: Quick to rise, slow to fall

However, during that time period oil has fallen about $25 to roughly $115 per barrel. Given the roughly 2-cent to 2.5-cent move for every $1 move in the price of oil, gasoline prices should have fallen 50-62 cents per gallon. Why haven't they?

Economist Peter Dawson told BloggingStocks Monday the answer is complex and contains many variables, but the strongest factors today appear to be gasoline station cash flow, and profit maximization.

As soon the price of oil increases, some gasoline stations will increase the price of gasoline, in anticipation of a price increase the oil company will institute for the next gasoline delivery, he said. "Failure to do so would create a monthly cash flow deficit for the gas station," Dawson said. "It's sort of like an additional monthly expense."

SYSCO (NYSE: SYY - option chain) shares are soaring higher today after the company reported a fourth-quarter profit of $334.1 million, or 55 cents per share, beating analysts' estimates of 52 cents per share(see more of today's earnings news). It turns out that low-cost, bulk food products are still in high demand, especially at a time when consumers pocketbooks are feeling the pinch, so fancier fare may be out of the question. 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 SYY.

SYY opened this morning at $30.29. So far today the stock has hit a low of $29.50 and a high of $31.47. As of 12:30, SYY is trading at $31.21, up $1.34 (4.5%). The chart for SYY looks neutral and S&P gives SYY a neutral 3 STARS (out of 5) hold ranking.

For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $27.50 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 a 13.6% return in just three and a half months as long as SYY is above $27.50 at November expiration. SYSCO would have to fall by more than 11% before we would start to lose money.

SYY hasn't been below $27.50 for more than a few days in the past year and has shown support around $28.50 recently.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in SYY.

Barron's (subscription required) reports that the news this week about Auction Rate Securities (ARS) leaves $220 billion worth of the $330 billion market still frozen. Those among the two-thirds of ARS holders who have not gotten any good news must have mixed feelings -- happy that some of their colleagues have the potential for relief, but wondering when they will get their money back.

The ARS market is complicated because the securities were issued in many different forms. Barron's reports that these issuers include "municipalities, closed-end funds, student-loan trusts and collateralized debt obligations [CDOs]." Many of these issuers have announced little, if any relief for those frozen in ARS hell. For example:

• Municipal ARS market has fallen 40% from $175 billion to $105 billion since the beginning of 2008 and only "5% to 8% of muni auctions are proceeding -- at interest rates of 8% to 15%."
• Closed-end funds have reduced the amount of ARS outstanding by 37% from $64 billion to $40 billion. For example, Nuveen's closed-end funds sold $500 million of variable-rate demand-preferred shares (VRDPs) last week to replace the same amount of ARS. (VRDPs' interest rates reset in auctions but have a put option that allows an investor to sell the VRDP to the bank running the auction if it fails). Barron's thinks that if the VRDP market functions, "more than 50% of closed-end-fund ARS could be redeemed" by the end of 2008.

Oil prices have moved sharply lower this morning, mostly as a result of strong upside in the U.S. dollar. Earlier in the session, oil fell as low as $115.75 a barrel, and is currently sitting at $116.15.

Prices have been dropping since mid July, and today's move comes as the dollar is reacting very positively to the recent decisions of the European Central Bank and the Bank of England to leave their interest rates unchanged. While the dollar still has a long way to go, it is encouraging to see the current rally.

As of today, the euro fell to a five month low versus the dollar, and with the dollar rising against both the British pound, and the Japanese yen, many optimistic analysts are predicting that a long recovery for the dollar is under way.

Hansen Natural (NASDAQ: HANS - option chain) shares are soaring higher today after the company reported yesterday evening its second quarter profit jumped to 31 percent to $50.2 million on sales of its Monster energy drink. Despite missing estimates by a penny, the growth numbers and decreasing operational expenses are encouraging investors. 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 HANS.

HANS opened this morning at $21.43. So far today the stock has hit a low of $20.67 and a high of $23.42. As of 12:55, HANS is trading at $23.42, up 1.77 (8.2%). The chart for HANS looks bearish and steady.

For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $17.50 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 a 13.6% return in just six weeks as long as HANS is above $17.50 at September expiration. Hansen would have to fall by more than 25% before we would start to lose money. Learn more about this type of trade here.

HANS hasn't been below $20 at all in the past year and has shown support around $21.50 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in HANS.

Oil continued its month-long decline Friday, as investors and traders reduced their stakes in the world's most vital commodity on concerns slower global growth will slow demand for commodities and raw materials.

Oil fell $3.62 to $116.40 in mid-day Friday trading. Other major commodities also declined. Gold fell $18.30 to $859.60 per ounce, silver fell 87 cents to $15.38 per ounce, and copper declined $223 to $7,442 per metric ton.

The other major energy commodities also fell Friday. Unleaded gasoline fell 8 cents to $2.92 per gallon, heating oil declined about 10 cents to $3.13 per gallon, and natural gas dropped 19 cents to $8.37 per million BTUs.

Likely slower global GDP growth weighs on oil

Economist Glen Langan told BloggingStocks Friday two factors are driving oil lower. First, the prospect of slower economic growth will likely slow oil demand growth in emerging markets. Second, a stronger U.S. dollar is reducing the appeal of oil as a currency hedge.

The dollar strengthened about 3 cents versus the euro to $1.5043 and about 2.5 cents versus the British pound to $1.9190 on Friday at mid-day.

"Regarding oil and gasoline we know that demand destruction is occurring in the United States. Now, at least initially, it appears slowing trade and global GDP growth will affect oil demand in emerging markets, as well. If the latter is the case, oil could fall below $100 or even below $90 per barrel," Langan said.

U.S. worker productivity increased a revised 2.2% in Q2, below the consensus estimate, as companies eliminated jobs without hurting output, the U.S. Labor Department announced Friday.

Economists surveyed by Bloomberg News had expected productivity to increase 2.7% in Q2. Productivity increased 2.6% in Q1. In the past 12 months, productivity is up 2.8%.

Productivity measures output per hour worked. Economists say rising productivity usually leads to increases in income, as businesses can increase salaries/wages paid without increasing their per unit costs.

Meanwhile, unit Q2 unit labor costs, a statistic adjusted for increases in efficiency, increased 1.3%. However, in the last 12 months labor costs have increased just 1.5%. Labor costs increased 2.2% and 4.7% in Q1 and in Q4 2007, respectively.

Economists surveyed by Bloomberg News had expected unit labor costs to increase 1.3% in Q2.

Q2 productivity takes some pressure off Fed

Economist Peter Dawson said the adequate Q2 2.2% productivity statistic, although below consensus, will provide argument support for doves on the U.S. Federal Reserve who want to keep interest rates as low as possible to encourage a U.S. economic recovery.

"Productivity is still rising at a healthy pace. That fact, combined will the relatively modest unit labor costs for the second quarter and year, present a picture that inflation is not getting out of control, which is good news for those seeking lower interest rates, and for business executives," Dawson said. "If these productivity and cost trends continue, hawks on the Fed are going to have a hard time making a case for an interest rate increase at the Fed's next meeting."

These days in commercial aviation, airlines are finding ways to operate more efficiently amid the toughest sector conditions since the first oil shock in 1973-74.

And while there's no love lost between passengers and the major carriers' unconventional way of increasing total consumer flying costs by adding separate baggage fees, there's one a-la-carte fee the public may be willing to pay for: a fee for internet access on airplanes.

Delta Air Lines (NYSE: DAL) announced it will start offering broadband internet service on domestic flights as early as October, The Washington Post reported Wednesday. Other airlines, including Continental (NYSE: CAL), Southwest (NYSE: LUV), and Virgin America are planning or testing internet services. (Delta will merge with Northwest Airlines (NYSE: NWA), pending U.S. Justice Department approval.)

Analysts generally credit JetBlue (NASDAQ: JBLU) with raising coach class amenity standards for flights in the United States when it introduced satellite TV and other services on its flights.

Delta's service will cost a $9.95 flat fee for flights lasting three hours or less and $12.95 for flights longer than three hours.

Public seen receptive to Wi-Fi fee

Stock analyst and frequent flier C. Leonard Bauer says Internet fees would be "a lucrative revenue stream" for the airlines, and ironically one that will probably be popular with the public.

Polo Ralph Lauren (NYSE: RL - option chain) shares are trading higher today after the company posted first-quarter earnings of $95.2 million, or 93 cents per share, blowing analysts' estimates of 72 cents per share out of the water. RL also lifted its full-year earnings forecast to a range of $4.00 to $4.10 per share, from previous guidance of $3.95 to $4.05 per share, above analysts' expectations $3.98 per share. It is looking like the slowing economic situation is not hitting RL that hard, which could also be a good sign for other high-end retailers as well. 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 RL.

RL opened this morning at $66.00. So far today the stock has hit a low of $63.90 and a high of $66.66. As of 12:45, RL is trading at $65.78, up $4.28 (6.9%). The chart for RL looks neutral and S&P gives RL a 3 STARS (out of 5) hold ranking.

For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $55 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 a 7.5% return in just seven weeks months as long as RL is above $55 at September expiration. Ralph Lauren would have to fall by more than 16% before we would start to lose money. Learn more about this type of trade here.