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Strategies & Market Trends : Calls and Puts for Income

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To: Bocor who wrote (5704)	5/1/2013 5:25:47 PM
From: Jim P.	2 Recommendations Read Replies (1) of 5891

Bocor, Based on the conference call the 2nd quarter will be a good ramp in earnings but the company will use some of the cash to increase the coverage ratio from current zero to something higher. Target ration is about 1.1. Even though I see a November distribution possibly around .65 or higher with an expected yield of under 7% or price above $37...floor of $37... The August distribution increase should be likely a penny maybe 2 which would have a floor around $35. Soft market this summer in energy is likely to test any floor IMO, MLP investors like to have the distribution in hand or within sight to some degree before they will bid up the price much beyond the lower limit of yeild 6.2%. With the market toppy I think I have been very lucky in my timing helped by knowing that MLP's most of the time rally in the month prior to distribution and it is a pretty good bet when the RSI is on the low end. APL was close to 20 when I placed the trade. So far this is working miserably for me in EVEP but I have a very small position on underwater puts. I will roll forward. EVEP burning for a different reason and eventually I will find the right buy point. I think APL will be whipped a little by market trend this next month but also expect the stock will correct between now and July and I can buy back some of the calls if I chose. I am in raise cash mode by any method as I am quite bias on this bull trend must end. Still writing some puts but keeping it to a cash covered basis. Good luck on the puts. Hope I have not said too much. I have followed this company for 5 years but seems much longer. I have been burned quite a few times by corrections. Jim

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