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!