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Strategies & Market Trends : Calls and Puts for Income
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To: Robohogs who wrote (5591)11/22/2012 5:33:58 AM
From: dealmakr 1 Recommendation  Read Replies (1) of 5891
 
Hi John,

Nice writeup on your thoughts about the coal sector. This area has been a bad scenario for me also.

I have a small piece of ACI @ 11 and have also reduced the costs by writing CC's as the stock dropped, maybe down to under 9 now and have the Dec 9 CC's open. CLF & WLT also in a severe house of pain through the same problems of buying other companies when things were topping out. WLT just issued 500mm debt @ better than 9% so you can see they are scrambling for liquidity, am short Dec & Jan 22.5 puts on WLT and will probably cover, the Dec at a profit and the Jan at a small loss. CLF am writing CC's on a reduced basis there also either weekly or monthly and sometimes both. May be more pain ahead as tax loss season comes into play on the sector, but over the long term they all should survive IMHO.

Sure wish that in the business schools they would teach these CEO wanabee's that the best way to manage your company is not to bet the farm on stupid acquisitions, the coal sector and mining area over the last 2 years would make for some classic case studies of leveraged buying at the top of the market.

BRCD starting to look interesting again with last report and am starting to dabble with NP's. Others that I like are KEY & RF for NP selling here out in duration. looking for some dividend increases from both next year.

Will be an interesting close to the year coming up and I expect a lot of volatility being event driven by the folks in DC and overseas.

Good trading

dealmakr
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