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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: brent hyatt who wrote (4108)	11/16/2001 11:51:35 PM
From: isopatch	Read Replies (1) \| Respond to of 36161

Of course there's no conversion value here. That's why the dividend yield IS so high. Converts at or above the level where conversion becomes viable always pay low dividend yields. They're constructed to have that kind of trade off of yield levels vs conversion value when the issue was IPO'ed. It's easy. Buy the preferred and combine it with long dated call options to maintain cap gains exposure until the common goes up enough for the conversion feature to start cranking up the price of the preferred. In the meantime you get the big dividend. Isopatch