We are adding the following spreads to our August recommended list.

We are recommending spreads in the following issues.

FRO - FRONTLINE LTD's business strategy is primarily based upon the following principles: emphasising operational safety and quality maintenance for all of its vessels; complying with all current and proposed environmental regulations; outsourcing technical operations and crewing; achieving low operational costs of vessels; achieving high utilisation of its vessels; competitive financing arrangements; and develop relationship to main charterers.

KMX - CarMax Group is a subsidiary of Circuit City Stores, Inc. The company is one of the nation's largest retailers of brand-name consumer electronics and major appliances, and a leading retailer of personal computers and music software. The company is adding value to this industry with a consumer offer that includes extraordinary selection; everyday low prices marked clearly on every car; quality gaurantees; and exceptional customer service.

SCHN - Schnitzer Steel Industries, Inc. collects, processes and recycles metals by operating one of the largest metals recycling businesses in the United States. They also manufacture finished steel products at their technologically advanced steel mini-mill.

AIG - American International Group, Inc., world leaders in insurance and financial services, is the leading international insurance organization with operations in more than one hundred thirty countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world.

SHLD - Sears Holdings Corporation, the parent of Kmart and Sears, Roebuck and Co., is the leading home appliance retailer in North America and is a retail sales leader in tools, lawn and garden, home electronics, and automotive repair and maintenance. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands.

We are recommending the following specific call credit spreads.

We usually try to avoid holding spreads over earnings reports but SHLD and AIG will be the exceptions this series.
Call credit spreads = bearish call spreads.