Conservative Buy-Write on HNZ

[stoic]

Buy HNZ @ 46.50
SCO Sept 47s @ 1.50

Prices at the natural as of 04/20/2010

3.06% dividend.

Sub-Industry: Packaged Food & Meats

Objective is to augment dividend income, but if it gets called that's ok too.

 

[danshirley]

HNZ@46.50
Sept 47 buy/write vs Sept 45/40 bull put spread
(dividends included)
...........Buy/Write...........Put Spread.....Prob>
35........(916)....................(400)...........99%
37.50....(666)....................(400)...........98%
40.........(416)....................(400)...........94%
42.50.....(166)....................(150)...........78%
45..........224.......................100............62%
47.50......284.......................100............42%
50..........284.......................100.............22%
-------------------------------------------------------
Req:.......4500......................400
Yield:......5.2%......................25%
Ann:........7.6%.....................37%
Hide the extra $4.1 K in a money market fund.

With HNZ as extended as it is you're more likely to lose money than make it.

http://finance.yahoo.com/q/bc?s=HNZ&t=5y&l=off&z=m&q=c&c=

you should have done the Buy/Write with HNZ under 40

 

[stoic]

Quote from danshirley:


you should have done the Buy/Write with HNZ under 40 [/B]

I should of bot IBM at 12.50 in '93 but I didn't(Post splits)

If all I do is collect dividends and premium for a while I'm fine with that.

 

[danshirley]

excuse me AW, I did't realize you were posting for admiration rather than advice.

 

[spindr0]

Quote from danshirley:

excuse me AW, I did't realize you were posting for admiration rather than advice.

Don't be a hypocrite. Take your own advice when participating in other people's threads:

Quote from danshirley:

Just for your info: I don't particularly post these trades for anyone but myself. I use the postings to follow my trades as I move about during the trading day. I use them to remiind myself of what I am trading and why. So your approval or disapproval, until I see some evidence that you can do better, are of little interest to me. Get your own life...or in this case your own thread.

 

[danshirley]

right in there spin...do you do anything else but watch these threads all day???

I would be glad to receive advice and alternate trades from anyone... but that has never been offered.

But then I stopped posting here since i found another way to keep track of my trades.

The alternate trade I offered was in good faith and good manners and I got a rude smart-ass reply as usual

to the board in general: BITE ME

 

[stoic]

Quote from danshirley:

excuse me AW, I did't realize you were posting for admiration rather than advice.

I was not seeking admiration or advice.

I was merely sharing what I believe to be a conservative strategy.

 

[exaltedangel09]

Can't hate,
it's a relatively safe play, as long as you do not mind holding HNZ incase it drops below $44. Either way if it's below $44, your still collecting a dividend + you could keep on selling calls.