We are recommending the following credit spreads to start the March 2014 expiration cycle.
We are recommending credit spreads for our Portfolio #1 in
the following issues.
FAST - Fastenal Company, together with its subsidiaries, operates as a wholesaler and retailer of industrial and
construction supplies in the United States, Canada, and internationally. The company offers fasteners and other industrial and
construction supplies under the Fastenal name. Its fastener products include threaded fasteners, such as bolts, nuts, screws,
studs, and related washers, which are used in manufactured products and building projects, as well as in the maintenance and
repair of machines and structures; and miscellaneous supplies and hardware consisting of various pins and machinery keys,
concrete anchors, metal framing systems, wire ropes, strut products, rivets, and related accessories. The company serves the
manufacturing market that comprise original equipment manufacturers, and maintenance and repair operations, as well as other
users, such as farmers, truckers, railroads, mining companies, federal, state and local governmental entities, schools, and
retail trades; and construction market, which include general, electrical, plumbing, sheet metal, and road contractors. As of
December 31, 2012, it operated 2,700 company-owned or leased stores. Fastenal Company was founded in 1967 and is headquartered
in Winona, Minnesota.
GME - GameStop Corp. operates as a video game retailer. It sells new and pre-owned video game hardware; physical and
digital video game software; pre-owned video game products; personal computer (PC) entertainment and other software in various
genres, including sports, action, strategy, adventure/role playing, and simulation; digital products, including downloadable
content, network points cards, prepaid digital and online timecards, and digitally downloadable software; video game
accessories and other products, such as controllers, memory cards, headsets, and other add-ons, as well as strategy guides,
magazines, and gaming-related toys; and mobile products, including tablets and accessories, smartphones, and MP3 players. The
company sells its products primarily through its GameStop, EB Games, and Micromania stores. It also operates electronic
commerce Websites comprising gamestop.com, ebgames.com.au, ebgames.co.nz, gamestop.ca, gamestop.it, gamestop.es, gamestop.ie,
gamestop.de, gamestop.co.uk, and micromania.fr. In addition, the company operates kongregate.com, a browser-based game site;
Spawn Labs, a streaming technology company; a digital PC distribution platform available at gamestop.com/pcgames; iOS and
Android mobile applications; and an online consumer electronics marketplace available at buymytronics.com. As of February 17,
2014, its retail network and family of brands included 6,488 company-operated stores in 15 countries worldwide. The company,
formerly known as GSC Holdings Corp., was founded in 1994 and is headquartered in Grapevine, Texas.
DAL - Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo in the United States and
internationally. Its route network is centered around a system of hub and international gateway airports in Amsterdam,
Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York - LaGuardia, New York-JFK, Paris-Charles de Gaulle, Salt
Lake City, Seattle and Tokyo-Narita. The company sells its tickets through various distribution channels, including telephone
reservations, delta.com, global distribution systems, and online travel agencies. Its also provides aircraft maintenance,
repair, and overhaul services for other aviation and airline customers, as well as offers staffing services, professional
security and training services, and aviation solutions for third parties; vacation packages; and aircraft charters and
aircraft management and programs. As of January 24, 2014, the company had a fleet of approximately 700 aircraft. Delta Air
Lines, Inc. was founded in 1924 and is headquartered in Atlanta, Georgia.
Call credit spreads = Bearish Call spreads.
Put credit spreads = Bullish put spreads.
We are recommending the following credit spreads to the March 2014 expiration cycle.
We are recommending credit spreads for our Portfolio #2 in
the following issues.
VLO - Valero Energy Corporation operates as an independent petroleum refining and marketing company. The company
operates through three segments: Refining, Ethanol, and Retail. The Refining segment engages in refining, wholesale marketing,
product supply and distribution, and transportation operations. It produces conventional gasoline, distillates, jet fuel,
asphalt, petrochemicals, lubricants, and other refined products. This segment also offers conventional blendstock for
oxygenate blending, reformulated gasoline blendstock for oxygenate blending, gasoline meeting the specifications of the
California Air Resources Board (CARB), CARB diesel fuel, and low-sulfur and ultra-low-sulfur diesel fuel. The Ethanol segment
produces ethanol and distillers grains. The Retail segment sells motor fuels at convenience stores, filling stations, and card
locks; convenience store merchandise and services in convenience stores; and home heating oil to residential customers. Valero
Energy Corporation markets its refined products through bulk and rack marketing network; and sells refined products through a
network of approximately 1,880 company-owned and leased retail sites and other under the Valero, Diamond Shamrock, Shamrock,
Ultramar, Beacon, and Texaco names in the U.S., Canada, the U.K., Aruba, and Ireland. It owns approximately 16 petroleum
refineries with a combined throughput capacity of approximately 3.0 million barrels per day; and operates 10 ethanol plants
with a combined nameplate production capacity of approximately 1.1 billion gallons per year. The company was formerly known as
Valero Refining and Marketing Company and changed its name to Valero Energy Corporation in August 1997. Valero Energy
Corporation was founded in 1955 and is headquartered in San Antonio, Texas.
DIS - The Walt Disney Company operates as an entertainment company worldwide. The company operates in five segments:
Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products, and Interactive. The Media Networks segment
operates broadcast and cable television networks, domestic television stations, and radio networks and stations; and is
involved in the television production and television distribution operations. Its cable networks include ESPN, Disney Channels
Worldwide, ABC Family, and SOAPnet, as well as UTV/Bindass. This segment owns eight domestic television stations. The Parks
and Resorts segment owns and operates the Walt Disney World Resort in Florida that includes theme parks; hotels; vacation club
properties; a retail, dining, and entertainment complex; a sports complex; conference centers; campgrounds; golf courses;
water parks; and other recreational facilities. This segment also operates Disneyland Resort in California; Disney Resort& Spa
in Hawaii; Disney Vacation Club, Disney Cruise Line, and Adventures by Disney; and Disneyland Paris, Hong Kong Disneyland
Resort, and Shanghai Disney Resort, as well as licenses the operations of Tokyo Disneyland Resort. The Studio Entertainment
segment produces and acquires live-action and animated motion pictures, direct-to-video content, musical recordings, and live
stage plays. The Consumer Products segment licenses trade names, characters, and visual and literary properties to retailers,
show promoters, and publishers; publishes entertainment and educational books, magazines, comic books; and operates English
language learning centers. This segment is involved in the retail and online distribution of products through the Disney Store
and DisneyStore.com. The Interactive segment creates and delivers entertainment and lifestyle content across interactive media
platforms. The company was founded in 1923 and is based in Burbank, California.
GILD - Gilead Sciences, Inc., a biopharmaceutical company, discovers, develops, and commercializes human
therapeutics for the treatment of life threatening diseases in North America, Europe, and Asia. Its products include Stribild,
Complera/Eviplera, Atripla, Truvada, Viread, and Emtriva for the treatment of human immunodeficiency virus (HIV) infection in
adults; and Viread and Hepsera products for the treatment of liver disease. The company also offers Letairis, an endothelin
receptor antagonist for the treatment of pulmonary arterial hypertension; Ranexa, a tablet used for the treatment of chronic
angina; Lexiscan/Rapiscan injection for use as a pharmacologic stress agent in radionuclide myocardial perfusion imaging;
Cayston, an inhaled antibiotic for the treatment of respiratory systems in cystic fibrosis patients; and Tamiflu, an oral
antiviral capsule for the treatment and prevention of influenza A and B. In addition, it provides other products, such as
AmBisome, an antifungal agent to treat serious invasive fungal infections; Vistide, an antiviral injection for the treatment
of cytomegalovirus retinitis in patients with AIDS; and Macugen, an anti-angiogenic oligonucleotide to treat neovascular
macular degeneration. Further, it has product candidates in various stages for the treatment of cardiovascular diseases,
respiratory diseases, and oncology diseases/inflammation. The company markets its products through its commercial teams and/or
in conjunction with third-party distributors and corporate partners. Gilead Sciences, Inc. has collaborations with BMS, GSK,
Janssen, and Japan Tobacco to develop and commercialize various products. The company was founded in 1987 and is headquartered
in Foster City, California.
Put credit spreads = Bullish put spreads.
We are recommending credit spreads for March 2014 in the following positions
for Portfolio #3:
XRX - Xerox Corporation provides business process and document management solutions worldwide. The companyÂ’s Services
segment offers various business process outsourcing services, including administrative and care management solutions to state
Medicaid programs and federally-funded government healthcare programs; healthcare payer and pharmaceutical services;
healthcare provider solutions for hospitals, doctors, and other care providers; human resources services; finance, accounting,
and procurement services; customer care services; technology-based transactional services for retail, travel, and non-
healthcare insurance companies; and communication and marketing services, as well as government and transportation services.
It also provides information technology outsourcing services comprising managed IT services consisting of administration,
database administration, systems monitoring, batch processing, data backup, network and infrastructure management, and
capacity planning; end-user computing services to manage platforms and devices; and IT solutions covering cloud, utility
computing, desktop virtualization, and other solutions. In addition, this segment offers document outsourcing services, such
as managed and centralized print services. The companyÂ’s Document Technology segment provides desktop monochrome and color
printers, multifunction printers, copiers, digital printing presses, and light production devices; and production printing and
publishing systems for the graphic communications marketplace and large enterprises, as well as toners, inks, and Xerox
replacement cartridges. Its Other segment sells paper, wide-format systems, network integration solutions, and electronic
presentation systems. The company sells its products and services through its sales force, as well as through a network of
independent agents, dealers, value-added resellers, systems integrators, and the Web. Xerox Corporation was founded in 1906
and is headquartered in Norwalk, Connecticut.
We are recommending the following specific credit spreads.
Call credit spreads = Bearish Call spreads.