COH - We are going back to the well one more time on Coach.  For those of you that are new to Option Writer, last month we sold the 27.50 puts.  Once the stock moved up and found some resistance, we sold the 35 calls as a hedge.  Coach is a designer and marketer of handbags and accessories. The Company offers luxury lifestyle accessories to the customers and provides consumers with fresh and relevant products. Coach's handbags and accessories use a range of quality fabrics and materials. Coach’s primary product offerings include handbags, women’s and men’s accessories, footwear, outerwear, business cases, sunwear, watches, travel bags, jewelry and fragrance.

We are selling the 27.5 strike again due to the correlation of the trendline crossing at around 28 and the price support from the mid March consolidation.  A move to the recent high of 34 or so may bring in the possibility of selling the calls again.  So I will keep you posted on that.  For those of you pushing the $50,000 hypothetical account to the limit, you can sell 9 contracts and still have some room for the margin requirement to adjust.  Selling just four contracts yeilds approximately 29% initial return.  Good trading!

Risk Management for COH
Strike Stop	=	$   27.50
Cost Basis Stop	=	$   26.75
Technical Stop	=	$   28.00
Premium Stop	=	$   28.48

Summary: The above charts have rows that are slightly shaded.  Those shaded rows represent positions that are near their max profitablilty.  My recommendation is to start closing these out in anticipation of creating May positions this weekend and next week.  The SPY 126 puts, the CSCO puts, the MOS puts, BHP Puts and the COH puts are on the top of the list to create margin.  Those of you who are trading these positions more aggressive should be taking profits and creating usable cash.  I may start providing May positions today and tomorrow.  Good trading!

MOS - Mosaic has been a tough one this month.  Hind sight says we should have covered the 120 strike last week when the stock was near 95 to 96.  Now the stock is above the 120 strike and in danger of costing us profits on the entire trade.  My recommendation is to close out the entire position (call and put).  At one point, I looked at covering the 120 and selling the 115 or even the 110.  At the time, it didn't make sense.  However, we could cover the 120 and sell the 125.  But the stock is only a stones throw away from that strike.  FYI - my suggestion is to just close out the position and live to play another day.  Earning season can be a pain.  We brought in about $5.70 per contract and it costs about $5.40 to cover the position.  Basically a wash.

Just a hypothetical but Murphy's law will come into play here and the stock will drop 10 points by the end of the week.

COH - The stock is trying to bust out of its range but can't seem to close above it yet.  Let's sell the 35 strike for April.

BHP - BHP Billiton has been on a vertical trajectory since hitting filling the gap at 60.51 a couple of weeks ago.  While an aggressive hedger could sell the 75 calls, I am suggesting selling the 80 strike for about $0.50/contract.

If you can't get the $0.50/contract, you could wait for weakness and sell the 75 strike.

WFR - MEMC has become a thorn in our side.  The company reported that they are only expecting $500 million versus $560 million.  The stock is down about 5 points at around the 71 level.  If you adjusted to the 70 Put and the 85 call, the pain isn't as bad.  However, should the stock decline below 69 again let's cover the put and move on.

WFR - If you waited or are waiting for the stock to test the 50 DMA before adjusting the position, then good job.  The call adjustment (85/95 Call Credit Spread) is now $0.95 per contract instead of $0.70 and the put adjustment (70/75 Put Debit Spread) is now $1.60 per contract rather than the $1.95 yesterday.  Patience would gain you a total of $0.60.  However, the stock dipped down about a point right after the I sent the post.  So I was right for about an hour.

The current position summary is below.

WFR - MEMC Electronics is bouncing nicely off its 200 exponential moving average.  While we have been using the 200 simple for most of the analysis I will take whatever I can get on this one.  For those of you with me on the position, the put was giving more room due to selling the 95 calls.  Hindsight would have us out at the strike and reselling the 65s yesterday.  But here we are with the stock up 4 points.  I am closing the 75s and selling the 70s.  This is most efficiently done by executing the 75/70 debit put spread for about $1.95 per contract.  Then adjust the 95 call to the 85 strike for April by selling the 95/85 Call spread for a credit of $0.70 per contract.  This move locks the position into a 15 point range for the next 3 weeks.  You could wait to see if the stock breaks above the 50 DMA at 76.57 to adjust the position.  I'm not waiting though.  The strangle position is currently down $10 on one contract.  Good luck!

So far, we are almost halfway to our $2,000 month goal.  We might need to do some position maintenance on WFR.  Look below for the risk management levels.

It is my intention to add one or two more positions this month.  I am revising my watchlist now and will send out an update ASAP.  BTW - today is the end of the first quarter.  EPS announcements will be hitting the wires in a few days.  Hope you all had a good day.

COH - Coach, Inc. engages in design and marketing of accessories and gifts for men and women in the United States and internationally. Its primary products include handbags; women's and men's accessories, such as money pieces, wristlets, cosmetic cases, belts, wallets, card cases, and other leather accessories; outerwear, including jackets, sweaters, gloves, hats, and scarves; business cases consisting of computer bags, messenger-style bags, and totes; and novelty accessories comprising key fobs, charms, electronic, time management, and pet accessories. The company also offers luggage and related accessories, such as travel kits and valet trays; jewelry, including primarily bangle bracelets; and fragrance comprising perfume sprays, purse sprays, and perfume solids.  The company last reported earnings on January 24th.  So we may not run into earnings before expiration.  Coach operates in the consumer discretionary sector that is somewhat exposed to the economic slowdown.  While my local store may not be the best indicator, it is usually packed with women shopping for overprices bags.

Sector: Consumer Goods

Industry: Textile - Apparel

The April 27.5 strike still has a decent amount of premium. It should be noted that we don't usually initiate new positions this late in the expiration cycle.  The initial premium yields nearly 16% with 18 days until expiration.  Not bad.  For those of you pushing the margin to the limit, you could sell a total of 8 contracts and still have a little margin room.  A close above the 50 DMA (pink line) would be a nice confirmation.  Basically I am throwing this position in anticipation of the stock closing above the moving average.

Risk Management for COH
Strike Stop	=	$   27.50
Cost Basis Stop	=	$   26.90
Technical Stop	=	$   26.93
Premium Stop	=	$   27.90

Have a nice day and Good Trading!