Calls and Puts for Income Message Board

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Strategies & Market Trends : Calls and Puts for Income

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To: Bridge Player who wrote (149)	4/11/2007 11:34:59 AM
From: Bridge Player	Read Replies (1) of 5891

American Home Mortgage, AHM, trades this morning around 20.35. It should be possible to do a buy-write, selling the May 20 call for 1.80, net cost $18.55, yield-if-called in May around 7.8%. AHM is a mortgage lender, not sub-prime, but definitely affected by the housing collapse, certainly financially and probably by investor psychology as well. They have a very high dividend yield, which was cut significantly just days ago. Please do your dd. IMO there is opportunity here as well as risk. AHM has been discussed thoroughly on the value thread for anyone interested in following the discussion there. Subject 10036

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