We are recommending the following credit spreads to add to our August 2012 expiration cycle.

We are recommending credit spreads for Portfolio #1 in the following issues.

BBY - Best Buy Co., Inc. operates as a retailer of consumer electronics, computing and mobile phone products, entertainment products, appliances, and related services primarily in the United States, Europe, Canada, and China. The company?s stores offer video products, including televisions, e-readers, navigation products, digital cameras and accessories, digital camcorders and accessories, and DVD and Blu-ray players; and audio products, such as MP3 players and accessories, home theater audio systems and components, musical instruments, and mobile electronics comprising car stereo and satellite radio products. Its stores also provide computing and mobile phone products consisting of notebook and desktop computers, tablets, monitors, mobile phones and related subscription service commissions, hard drives and other storage devices, and networking equipment, as well as office supplies and other related accessories, such as printers; entertainment software products, including video gaming hardware and software, DVDs, Blu-rays, CDs, digital downloads, and computer software; and appliances, air conditioners, and housewares. In addition, the company offers service contracts, warranties, computer-related services, and product repair, as well as delivery and installation services for home theaters, and mobile audio and appliances; and snacks and beverages. It operates its retail stores and call centers, as well as online retail operations under various brand names, such as Best Buy, Best Buy Mobile, The Carphone Warehouse, Five Star, Future Shop, Geek Squad, Magnolia Audio Video, Pacific Sales, and The Phone House.

NAV - Navistar International Corporation, through its subsidiaries, manufactures and sells commercial and military trucks, buses, diesel engines, recreational vehicles (RVs), and chassis, as well as provides service parts for trucks and trailers. It operates in four segments: Truck, Engine, Parts, and Financial Services. The Truck segment manufactures and distributes trucks and buses for the common carrier, private carrier, government/service, leasing, construction, energy/petroleum, military vehicles, and student and commercial transportation markets under the International and IC brands. It also produces chassis for motor homes and commercial step-van vehicles under the Workhorse Custom Chassis brand name; RVs, including non-motorized towables under the Monaco family of brands; and concrete mixers under the Continental Mixers brand. The Engine segment designs, manufactures, and sells diesel engines under the MaxxForce brand name. It also sells engines for industrial and agricultural applications. The Parts segment provides customers with products required to support the company?s brands, as well as offers other truck, trailer, and engine service parts. The Financial Services segment provides and manages retail, wholesale, and lease financing services for products sold by the Truck and Parts segments and their dealers.

IR - Ingersoll-Rand Public Limited Company engages in the design, manufacture, sale, and service of a diverse portfolio of industrial and commercial products in the United States and internationally. The company?s Climate Solutions segment delivers refrigeration; and heating, ventilation, and air conditioning (HVAC) solutions. This segment offers a range of products, services, and solutions under the Thermo King and Trane brands to manage controlled temperature environments for transport and commercial HVAC markets. Its Residential Solutions segment provides mechanical and electronic locks, HVAC systems, indoor air quality solutions, advanced controls, portable security systems, and remote home management products under the American Standard, Schlage, and Trane names to homeowners in North America and South America. The company?s Industrial Technologies segment offers compressed air systems, tools, pumps, and fluid and material handling systems, as well as golf, utility, and rough terrain vehicles; and services comprising full coverage and preventative maintenance service contracts, service parts, installation, and remanufactured compressors and tools. This segment offers its products under the Club Car, Ingersoll Rand, and ARO brands. Its Security Technologies segment offers electronic and biometric access control systems and software, locks and locksets, door closers, exit devices, and steel doors and frames, as well as time, attendance, and personnel scheduling systems under the CISA, LCN, Schlage, and Von Duprin names.

SHAW - The Shaw Group Inc. provides technology, engineering, procurement, construction, maintenance, fabrication, manufacture, consulting, remediation, and facilities management services to electric utilities, independent and merchant power producers, government agencies, multinational and national oil companies, and industrial corporations worldwide. The company?s Power segment provides project-related services, including design, engineering, construction, procurement, technology, and consulting services primarily to the fossil and nuclear power generation industries. Its Plant Services segment offers electric power refueling outage maintenance, turnaround and routine maintenance, modifications, capital construction, off-site modularization, fabrication, reliability engineering, plant engineering, plant support, and specialty services. This segment performs services to restore, rebuild, repair, renovate, and modify industrial facilities, as well as offer predictive and preventive maintenance. The company?s Environmental and Infrastructure segment provides program and project management, management, design-build, engineering and construction, sustainability and energy efficiency, science and technology, facilities management, and emergency response and disaster recovery services for government and private sector clients.

We are recommending the following specific credit spreads.

Call credit spreads = bearish call spreads.

We are recommending credit spreads for Portfolio #2 in the following issues.

LULU - lululemon athletica inc. , together with its subsidiaries, designs, manufactures, and distributes athletic apparel for women, men, and female youth. The company?s line of apparel and accessories include fitness pants, shorts, tops, and jackets for healthy lifestyle activities, such as yoga, running, and general fitness. Its fitness-related accessories comprise bags, socks, underwear, yoga mats, instructional yoga DVDs, and water bottles. The company sells its products through a chain of corporate-owned and franchise stores; direct to consumer through e-commerce; and a network of wholesale channel, such as yoga studios, health clubs, and fitness centers. As of January 29, 2012, it had 47 stores in Canada, 108 stores in the United States, 18 stores in Australia, and 1 store in New Zealand under the lululemon athletica and ivivva athletica brand names. lululemon athletica inc. was founded in 1998 and is based in Vancouver, Canada.

IBM - International Business Machines Corporation provides information technology (IT) products and services worldwide. The company operates in five segments: Global Technology Services, Global Business Services, Software, Systems and Technology, and Global Financing. The Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology- and process-based services. The Global Business Services segment offers consulting and systems integration, and application management services. The Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, performance management business analytics, intelligence, and data analytics; Tivoli software for identity management, data security, storage management, cloud computing, enterprise mobility, and automation and provisioning of the datacenter; Lotus Software to connect people and processes for communication; rational software to support software development for IT and embedded systems; security systems software; and operating systems software.

GS - The Goldman Sachs Group, Inc. provides investment banking, securities, and investment management services, as well as a range of financial services to corporations, financial institutions, governments and high-net-worth individuals worldwide. Its Investment Banking segment offers financial advisory services, including advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense, risk management, and restructurings and spin-offs; and underwriting activities comprising public offerings and private placements of a range of securities, loans and other financial instruments, and derivative transactions. The company?s Institutional Client Services segment provides client execution services, such as fixed income, currency, and commodities client execution related to making markets in interest rate products, credit products, mortgages, currencies, and commodities; and equities related to making markets in equity products, as well as commissions and fees from executing and clearing institutional client transactions on stock, options, and futures exchanges. This segment also engages in the securities services business providing financing, securities lending, and other prime brokerage services to institutional clients, including hedge funds, mutual funds, pension funds, and foundations; and offers prime brokerage services. Its Investing and Lending segment originates longer-term loans; and invests in debt securities, loans, public and private equity securities, real estate, consolidated investment entities, and power generation facilities.

We are recommending the following specific credit spreads.

Call credit spreads = bearish call spreads.