How To Write Covered Calls - An Ongoing Real Case Study! Message Board

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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: XOsDaWAY2GO who wrote (9868)	3/3/1999 11:47:00 PM
From: Herm	Read Replies (1) of 14162

AVP AVP has a growth rate of 15.6%. The next ex-div. date is March 11, 1999 and AVP will pay $.18 or $.68 annually (1.5%). Plenty of open interest. You need to be cleared for selling PUTs. Look at the chart below and figure out how much risk you are willing to take. AVP does sell LEAPs. Right now it may be dangerous to write PUTs since the stock is making a new 52-week high and may peter out soon and pull back. Putting you in the hot seat if they put it to you. Now, if you want to own more AVP and want to buy it at a discount (when they put it to you) it might be worth the risk at say the $40 strike price which is the bottom price support level IF AVP dumps. The premies you collect would lower your cost in the stock. You then can turn around if they put it to you and write CCs to make more money. Writing PUTs is a slick way to own stock cheap. iqc.com NYSE: (AVP : $46 5/8)$12,310 million Market Cap at March 3, 1999 Ranks 270th in the Fortune 500 on Revenue & 234th on Profit. Employs 33,700. Trades at the 28.0 X average multiple at which the Personal Products SubIndustry is priced

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