Conservative Buy-Write on HNZ

Discussion in 'Options' started by stoic, Apr 20, 2010.

  1. stoic

    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.
     
  2. 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
     
  3. stoic

    stoic

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


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



     
  6. 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
     
  7. stoic

    stoic

    I was not seeking admiration or advice.

    I was merely sharing what I believe to be a conservative strategy.
     
  8. exaltedangel09

    exaltedangel09 Guest

    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.