Tobacco control issues

Senator questioned the qualifications of a woman recently hired as a top tobacco-control official accused of Iowa and director of public health in preventing state laws regulating its recruitment to the controversial meeting on Friday.

Megan O’Brien was hired as the administrator of the tobacco prevention and control of earlier this month after an informal search process. Meeting on Friday of the Tobacco Prevention and Control Commission, which oversees the division, was her first official performance in this role.

State Senator Herman Quirmbach, Ames Democrat and non-voting member of the committee, opened the meeting criticized the hiring of O’Brien. Iowa Department of Public Health Director Mariannette Miller-Meeks is authorized to appoint the division administrator, but state law requires the commission to recommend candidates for the assessment work and consultation with the public health director for hire.

The Commission was not able to adequately consider the applicants for this position, Quirmbach argued, and the preliminary recommendation of two members of the committee suggest that another candidate will be chosen not taken into account Miller-Meeks.

“The final choice (about who to work) to the Director, it is clear under the code” Quirmbach said. “But this commission was not given the opportunity to fulfill their legal responsibility, and I fault the director of the Department of Health on this issue.”

In a later interview, Quirmbach is how hiring is played, “shows the weakness of their own skills, Miller-Meeks” management. “

Miller-Meeks, however, said that she consulted with the office of State Attorney General, and received assurances that the process that led to the hiring O’Brien followed state law. It provided an opportunity for committee members to meet candidates before the appointment, in fact, were “too generous”.

“This process has been guided by the Attorney General’s office, and we followed the recommendations were in accordance with the statute,” she said.

The administrator position came open this spring, when the Interim Director Aaron Swanson left for another job. Several people have filed, two of which – including O’Brien – were selected as finalists in the Miller-Meeks. Commission Chairman and Vice-President met with both candidates and recommend finalists to hire another, but none of the candidates have been officially verified by the commission as a whole.

Miller-Meeks has officially hired O’Brien about two weeks ago.

During the process by which O’Brien was hired, Quirmbach also questioned her qualifications for the top job in the department. She has no management experience and a slight retreat in the tobacco policy and public health, he said.

Not everyone, however, share a concern Quirmbach.

A commission member Thomas A. Greene said that the extent to which the senator suggested that the Commission should be involved amounted to “micro” and that he was comfortable with the process of hiring Miller-Meeks. “Chad Jensen, member of the committee also advocated hiring O’Brien.

The discussion ended with a plan for members of the Commission in accordance with the Office of the Attorney General to discuss the requirements under state law for the assessment and the expectations set for O’Brien.

Quirmbach and Miller-Meeks previously fought for anti-tobacco activities of the state. Last year, the director, resigned after the Miller-Meeks said her position was cut due to budget cuts. Quirmbach is characterized by care in the shooting and accused Miller-Meeks of seking to “dissolve” the division.

O’Brien worked at the department for several months. In his opening comments, she acknowledged her ignorance of the specifics of the tobacco policy, but promised her skills and experience may increase the political experience already in place.

“I do not expect that I have done everything to earn the respect and trust again, but I expect that I will,” she said. “At the same time, I hope, will be treated with some professional ethics, as well as be able to perform these duties.”

Big Tobacco vs rules New Zealands rules

A multinational cigarette company began an aggressive cigarette fightback against laws and prices to get people to quit the habit. A series of tax increase – with more on the way – has made New Zealand cigarettes among the most expensive in the OECD countries.

Other measures, such as a simple package are under consideration, and on Monday, stores will have to hide their cigarette displays. But the tobacco giant Philip Morris said that the regulations are going too far. The company, which has the third largest market share in New Zealand tobacco, distributes maps to direct people to the store website, through which smokers can have their say on the rules.

Retailers are asked to send cards to customers to buy Philip Morris products. The site myopinioncounts.co.nz, which was launched yesterday, “was a place where adult smokers may express its views on regulatory issues,” said a spokesman for Philip Morris, Chris Bishop.

“We talked to our customers … and we really got the sense that they wanted to have the opportunity to learn more about these issues and express their concerns about them,” he said. But anti-smoking group said yesterday that the move “reeked of desperation.” “The fact that they emerge from the shadows and begins to be more aggressive … to try to attract the public to lobby on their behalf, shows that they are afraid of things the government is trying to do,” said Action on Smoking and Health director Ben Youdan.

“If your company gets to the point where it can no longer engage constructively with policy makers and begins to attack them through the website, it shows you die.” In April, the tobacco companies a blow against the Cabinet decision to introduce plain packaging, subject to consultation. Imperial Tobacco and British American Tobacco announced a move would lead to a black market in tobacco.

Mr. Bishop said Philip Morris; consumers would like more information about such matters. He said that the web site and store cards were “in for a while,” but I can not say when it was first proposed. “Obviously, it takes several weeks for the website to get up. This did not happen at night … and it’s not what we planned five years ago.”

Mr. Youdan said the move Philip Morris showed exactly what the company considered its customers. “Smokers are drug addicts to them, who pay money to remain dependent on their products. “But I think they will see through it.”

He said it would be interesting to see how this plan is to deal the cards in the shops would work. “I suspect that they will try to stir up fears of retailers – what it will cost you business -. And use that as a way to intimidate retailers to take action” But Philip Morris says that the card system is voluntary.

The two main supermarket chains yesterday said they would not be handing the cards to customers.

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WHO urges China to tax smokers?

The tax on cigarettes should be increased to combat nicotine addiction in the world’s largest tobacco producer and consumer, the World Health Organization chief said.

Director General Margaret Chan called for more taxes on Wednesday after the ceremony the Minister of Health Chen Zhu, a certificate in recognition of his efforts to combat smoking. “There is still much room for China to increase its tobacco tax, and the government should take additional steps with respect to this, to curb smoking,” she told China Daily.

“Experience shows that higher taxes to keep people, especially young people from smoking,” she said. International studies show that a 1% increase in the price of a pack of cigarettes, the number of smokers is reduced by about 0.4%, she said.”Every time I came to China and had the opportunity to talk with Chinese leaders, I encouraged them to increase taxes on tobacco products,” she added.

There is a huge financial cost of treating tobacco-related disease, Chan said. China has 350 million smokers; more than one-third of the world, and at least 1 million people die from smoking-related diseases every year, according to the ministry. By 2020, the rate of deaths is expected to reach 2 million, without effective intervention.

Government agencies such as ministries of health and education, have introduced policies such as smoking in hospitals and schools, as well as bans on smoking in most indoor public places. Tobacco products were also sent to the tax. In 2009, the government increased the tax on tobacco products for at least 6%, mainly on the more expensive brands.

“But it has little effect on curbing tobacco use, especially with the low-end brands,” said Yang Gonghuan, former director of the Office of Tobacco Control, Chinese Center for Disease Control and Prevention.

Taxes on tobacco products, even after raising interest rates remain very low on a global scale. “Countries are looking at how to increase the tax on tobacco products, and China must also raise the tax on their circumstances,” said Chan. China signed the WHO Framework Convention on Tobacco Control and ratified it in 2005.

The campaign to combat nicotine addiction falls under the Ministry of Industry and Information Technology, which oversees the state monopoly of tobacco bureau, often referred to as the China

National Tobacco Corporation

Chen suggested that the implementation of the Framework should be carried out by the Ministry of Health. “I’d give the award of the Ministry of Industry and Information Technology, to encourage them,” she said. Vice-Premier Li Keqiang met Chan in Beijing on Wednesday.

Lee Chang congratulated her second term as Director-General of WHO, which was announced in May. Chan praised the progress of China’s medical reform, which, incidentally, saw the health insurance increase from 30% to 95% of residents over the past five yea

Design of plain packages

Van Onselen gets into the foam about growth forecast value of the total taxed tobacco for the first six months of the introduction of plain packaging, in December 2012 (“course”), it is difficult to count the ways that he can not understand why his conclusions so prone to error .

Many of my colleagues were very surprised by his statement that during the past 40 years the government had “billions” of tobacco control in Australia. Forty years takes us back to 1972. I worked on the first nationwide campaign in Australia in New South Wales in 1982. I do not remember our budget, but it was, of course, for less than $ 1 million. Expenditures under this consisted of several posters and brochures.

It was not until 1997 that the big money started to go in the fight against tobacco and its evaluation, starting with only $ 3.5 m a year. Add up all expenses and you will be pushed to get the total cost for 40 years and a half billion, not “billions”.

Van Onselen also does not seem to realize that plain packaging will not see packets that are “shrunken logos”: they will not have any logos, only brand in the standard font. Also, that the case “goes to the Supreme Court”: he went there in April, a decision is expected before October.

Decreases in the prevalence of smoking, which was pretty much continuously since the beginning of research in the 1970s reflects the interaction between many factors.

Niagara negative information is initially healthy enough to start the rot of tobacco. Rising prices sent the cost of smoking tobacco through a series of psychological barriers, with $ 20 packs of the impending attack of the body as just another industry.

The social demoralization caused by expulsion of smokers smoking outside buildings must stop sharing them with smoke, bottomless revelation of the falsity of the tobacco industry, including their designs drooling in children in their internal documents, and the end all tobacco advertising, smoking has led to the control records.

Still, tobacco kills more Australians each year than many other known causes of death combined.

Normal packages promise to add to the mix of toxic smoke and drive further into the story. Along the way, detractors and messengers for the industry will continue to question every new proposal advanced recipes such as “it’s never been done before – there is no evidence.

Finally, all those who believe that the excise tax on tobacco products are nothing more than a cynical exercise in raising government revenues need only spend a few hours in the swamp of millions of pages of internal tobacco industry documents available on the Internet after a lawsuit in the United States.

Here are some examples: “The surest way to reduce consumption through tax”, “high prices for cigarettes more than any other cigarette attribute, has the greatest impact on the output share of the population” and “Of all the problems are – taxation – it disturbs us the most “.

And again: “The problem of raising taxes is the fact that this decrease in consumption.”

Taxes on tobacco products currently used in Australia, is very effective to reduce tobacco consumption, with the added advantage that the Australian community are easily assembled form of tax revenues, which are used for the benefit of us all.

Haverstraw’s tobacco law faces with costly federal suit

To avoid the risk of incurring hefty legal services to fight the suit manufacturers of tobacco products, the village is considering the withdrawal of local laws that restrict tobacco displays in shops.

In April, the village passed a law forbidding the stores that are accessible to minor’s paraded products containing tobacco or nicotine, such as cigarettes, cigars and pipe and chewing tobacco.

Haverstraw has supported measures, POW’R on Tobacco Control, a coalition focused on reducing the risks of tobacco-related diseases by reducing tobacco consumption; officials warned that the youth of the village is in the habit of smoking cigarettes exposed images.

About three weeks ago, seven tobacco manufacturers – Lorillard Tobacco Co, RJ Reynolds Tobacco Co, Philip Morris USA Inc, Santa Fe Natural Tobacco Company, the American company Snuff LLC, the U.S. Smokeless Tobacco Brands Inc. and the company John Middleton, – and in New York Association of Convenience Stores has filed a federal lawsuit against the village of Haverstraw to challenge the law, arguing that it violates freedom of speech.

Village officials said they were in discussions with the anti-tobacco advocacy groups that could provide financial assistance to fight the lawsuit, filed in U.S. District Court in White Plains. To gain time, the Board of Trustees at its last meeting unanimously decided to postpone the law from taking effect for six months, from October this year to April 2013.

But the council is now considering repealing the law. The decision can be taken at a special meeting set for 5 pm Monday through Haverstraw Village Hall.

“We will probably give it up,” said Mayor Michael Kohut, who has made it clear that while he believes in the principle of law in the country is not going to waste taxpayer money fighting the case. “We thought it would be someone coming to defend it for us, but, as now, was not.”

Haverstraw Village Attorney Jay Hood Jr. said last conference call with lawyers representing the plaintiff had convinced him that the repeal of the law would be “reasonable steps” to the village.

“They agreed that if we repeal the law, they will seek attorneys fees do not, and they will dismiss their lawsuit,” Hood said. “So I think it is reasonable to consider them or simply to repeal the law and is not responsible for any court costs or anything like that in the future.”

The village was the first – and so far the only – municipality in the country with a law limiting tobacco displays in shops, the anti-tobacco activist groups said.

Maureen Kenny, Director POW’R on Tobacco Control, said the village was known about the possibility of being sued by manufacturers of tobacco products through the adoption of the law. She and other anti-tobacco advocates appreciated the village for being a pioneer, although such a possibility.

“They showed great courage and I admire him for it,” said Kenny. “Unfortunately, it seems that the lawyers of the tobacco industry would be successful in putting pressure on the village to abolish the law quickly and the risk of having to pay for his legal costs accrued to date. This is absurd.”

David Sutton, spokesman for Altria, parent company of Philip Morris USA, U.S. brands of smokeless tobacco and John Middleton, said the company had no comment on its observation.

BAT buys tobacco from the ULPI

British American Tobacco (BAT) said that he always bought the tobacco from the Philippines, even when he left the country in 2009.

James Lafferty, BAT Philippines Director General said that the cigarette firms buy about 2 to 3 million pounds of Philippine tobacco each year, even when she packed up and left the country three years ago. Lafferty said the Philippine Tobacco Company uses some of its products, selling cigarettes in Europe and Asia.

“It’s not massive, but we bought the Philippine tobacco, when we were not even here. BAT does not sell anything in the Philippines, but we bought tobacco here,” said Lafferty; he denied reports that the company never bought one leaf tobacco in the country. Lafferty said the company buys tobacco from a generic list Philippines, Inc (ULPI).

According to the National Tobacco Administration (NTA), ULPI bought 44,763,000 pounds of leaf tobacco in the local 2011, or 56.43% of 79.33 million kg of total production last year. “It shows our commitment to the country, we purchase each year, not even a business, because we export and use it in other countries,” says Lafferty. Cigarette Company had left the Philippines in 2009, as he claims that he could not survive under the current excise tax system cigarette brands, as introduced in the country since 1997 introduced a higher tax rate.

BAT back in February of this year, he expects that the excise tax reform proposals, priority actions Aquino administration, will soon be adopted and will provide a “level playing field” for all parties to the tobacco industry. Lafferty said the company plans to double its purchase of leaf tobacco in the Philippines, with 1.8 million kg this year to 3.6 million kg in the next year, as part of its expansion plans in preparation for the anticipated adoption of the so-called sin tax expense reform.

Lafferty said that BAT is about 5% of the total production of tobacco leaf in the Philippines every year, despite a 0.1% share of the local market of tobacco products. In general, the tobacco market in the Philippines is estimated at 100 billion pieces per year. “So we have about 5 percent of the market, a 0.1% stake. I think that it’s not bad. I buy fifty times my share of local, this is a real commitment to the Filipino farmers,” says Lafferty.

BAT hopes to sell 150 million sticks of cigarettes in the Philippines this year as it plans to expand its products in more retail stores across the country. The company has 900 brands worldwide, but this is only the beginning of Lucky strike brand in the Philippines since he returned in February. Lafferty said that Cigarette Company hopes to sell more of their products in the Philippines excise tax reform should be in place next year. BAT aims to remove Annex D, which in the current tax system classifies cigarette brands in the old and new, allowing different tax rates for brands that have been in the country until 1997, and those who entered in the local cigarette industry in 1997 year.

The company maintains the support of the Government House Bill 5727 by the author Cavite Rep. Joseph Emilio Abaya, which was approved by Congress last month. The excise tax reform bill is expected to generate P33 billion in revenues from both tobacco and alcohol, in the first year of its implementation, 85% of which goes to health care, and the remaining 15% will be used to support the tobacco manufacturers.

Cigarette giant Philip Morris Fortune Tobacco Corporation (PMFTC) accounts for more than 90% of the local market of tobacco products. The company was the second largest buyer of tobacco in 2011, the acquisition of 14,739,000 kg or 18.58% of total tobacco production in the last year.

California's tobacco tax

A few weeks after conceding defeat in the June 5 major supporters of the initiative of raising taxes on tobacco to fund cancer research have asked for a recount of votes in some areas of Los Angeles.

Proposition 29 lost 50.3 percent to 49.7 percent – a margin of just 29,565 votes out of more than 5 million cast state – according to unofficial results posted by the office secretary of state. Supporters of the measures found June 22, stating that the gap is too large to overcome as the final ballots were counted.

But to tell it was suggested in some parts of Los Angeles County on Monday deadline for such a request, Registrar-Recorder/County Clerk Dean Logan confirmed on Thursday. Logan says the 191 sites were selected for counting of votes of supporters.

The request was filed by John Maa, in accordance with the Secretary of State office. A doctor by that name, who is a member of the American Heart Association Western States Affiliate, has been featured in press releases and advertisements yes 29. Attorney filter, Bradley W. Hertz in the San Francisco law firm of Sutton, was not immediately available for comment.

Formally, the proposal 29 campaign denied any involvement in the recount. Official Representative Tim Douglass wrote in an email that “no one with any official connection to the campaign with such a request.”

Logan says his department will begin the process of telling the following Monday, the counting of ballots electronically before hand the number of mid-week. He said he expects the recount, which may take more than a week, will cost about $ 5,700 a day. The campaign asked to tell what has to cover the amount of daily deposits, although the taxpayers pick up the tab if the process of changing the election results.

Selected areas were about 48,000 of about 900,000 votes cast for and against the measure in the country. The campaign can add more sites, or pull the plug on the process at any time, Logan said.

Proposition 29 would increase the cigarette tax by $ 1 a pack to pay for cancer research and smoking cessation programs. It was organized by the American Cancer Society, American Heart Association and American Lung Association.

The opposition campaign running on tens of millions of dollars from tobacco companies argue that the income can be put to better use and control panel is created; this measure lacks accountability and creates more bureaucracy.

Tobacco factories were supplied with 3 millions of tobacco

British American Tobacco is able to perform miracles and magic, or, more likely, it has something up its sleeve.

In the advertising pages in the Philippine Daily Star on June 28, presumably, taken out and paid by “Concerned Entrepreneurs Against Monopoly / DB law”: it was the assertion that as a result of a level playing field from the Sin Tax Reform, a new players  will buy 3 million kilograms of tobacco in the following year.

The proposal is for a foreign company for to buy the local leaf. The truth, he left the Philippines in 1979, unable to compete with local producers.

BAT has never bought a leaf of tobacco. It left the country after it lost its questioning the reclassification of cigarettes. It sold 50 million sticks of Lucky strike brand, which is equivalent to 2.5 million 20-stick packs.

BAT tried to come back looking for what he calls a level playing field, a field that increases the excise tax on cigarettes by about 700%, while Lucky Strike, that it had intended to import has yet to establish the tax base.

According to Teresa Habitan, Deputy Minister of Finance, the cigarettes that BAT intends to import that will be taxed at the same rate as local low-end brands are estimated to account for 65% of cigarette demand.

If BAT, as announced, creates a $ 300 million cigarette factory of the plant, which will use only about 3 million pounds of the local leaf, or about 2.5% of the total production of 80 million kg of tobacco in 2011, it will be asking to lose its shirt.

Cristino Panlilio, Deputy Minister of Trade and Industry, went out of his way of saying that BAT does not give tax breaks or incentives. But here’s the rub. Panlilio said that if BAT establishes its operations in less developed areas (LDA) will be granted privileges, apparently of tax benefits that reduce production costs and give him an advantage over their competitors.

The miracles in the BAT plan is expected that he accuses Philip Morris, and good luck to perpetuate the monopoly of tobacco accounts for more than 95 percent of the total demand for cigarettes, although there are four players in the business.

The plan to create 300-M cigarette is clearly designed to break up the alleged monopoly of Philip Morris and Fortune Tobacco. This means that he will fight in the market, by all means – fair or foul.

BAT is an opportunity to import cigarettes, as previously planned, the import of tobacco products and increase consumption of local list of more than 3 million pounds.

What are the other possibilities? There are many. One of them is BAT will not created $ 300 million plant. This is a carrot dangled in front of the government. If this happens, it will lead to an increase in the consumption of leaves beyond 3 million pounds of ad claims that the new party will buy, presumably from local producers of the sheet.

BAT, as the proposed excise tax assets, will pay the same taxes as local low-end brand of cigarettes. He will have to produce cigarettes in the same category. But how far it can go using only three million kilograms of tobacco, when his nearest competitor clearly consumes most of the 80 million kilograms of leaf production?

Another possibility is BAT to import the bulk of 150 million sticks, he says he will produce. Yes, imported cigarettes will pay the same taxes as local production. But he will have the advantage of significantly lower costs, because all it needs is a string of warehouses, a large fleet of trucks and a large sales force.

A third possibility is to receive the benefits of BAT unknown if he finds a plant in less developed area, but presumably closer to the tobacco growing region, and many provinces in northern Luzon. Who will define “less-developed areas”? It’s a great question, because some of the city, say Tarlac, Pangasinan and Pampanga, even can not be arbitrarily classified as less developed areas.

It could be a decision that forced BAT to get together and go home. Now she returns, arguing that the playing field must be aligned with the over-taxation of low-end cigarettes, which, as noted above, account for about 65% of total demand. Lucky Strike is not lower, but the price of cheap cigarettes may be close to the BAT brand. If the price of the same or a Lucky Strike is only slightly higher, it will dominate the market and to prohibit smokers the opportunity to buy local brands.

The purpose of trying to reduce smoking by raising cigarette prices will never be executed, because smokers will switch to smuggled cigarettes or less expensive brands of BAT.

The proposed roil cigar industry

 Moreno said that the tobacco industry gets an unfair taxation and regulation. He is particularly concerned about what will happen to his business as the Food and Drug Administration believes additional rules on the cigar industry.

“We don’t need more regulation. Everyone knows smoking is bad for your health. It is on TV 24 hours a day.” Food and Drug Administration, which had been given the authority to regulate tobacco in 2009, family smoking prevention and tobacco control law, can rule this summer on additional restrictions on the cigar.  The Agency may impose restrictions on advertising of cigars and retail. This may require more prominent health warnings. This may dictate the size and shape of cigars that were sold. Regulators can go on and emulate Canada, cigar store where customers can not enter into the humidor. They choose from a list of cigars, which then led to them.

“You take a national treasure, if you limit us.”  Moreno said he was particularly concerned about rules that would restrict the ability of customers to choose cigar humidor. “If we go to such extremes, the cigar industry will drop dramatically,” said Moreno. “People like to look and feel. Picture does not smell. It has no connection. “That’s why we’re still here when you choose you can feel the freshness of the cigar,” he said. U.S. sales last year exceeded 107 billion tobacco dollars, but only 7.8 billion dollars have been selling cigars, according to statistics from Euromonitor International. There are 13300000 cigar smokers in the United States, in accordance with national numbers.

Those in the cigar industry tend to change in the Congress for the protection of premium hand-rolled cigars from the FDA regulate the movement say will protect the 85,000 jobs at small businesses across the country. Resolutions and House of Representatives and the Senate remains in committee. In the House, the resolution presented by U.S. Rep. Bill Posey, Republican representing the 15th District in Florida, has acquired more than 200 authors. In the Senate resolution, authored by Sen. Bill Nelson, has more than 10 authors. With regard to regulation, it is the greatest need to “put an end to the production and sale of products that have the greatest appeal to young people,” said Matt Myers, President Campaign for Tobacco-Free Kids. He singled out the big machine made cigars, cigar wrappers and a little tobacco, which are sold in stores at low prices and in a variety of flavors, like peach and strawberry.

“It’s very fragrant little cigars clearly disproportionate to address young people and has the potential to serve as a starter tobacco products,” Myers said. The new rules may affect smokers like Mike Orlando Lopez and his wife Crystal, all of which are relaxing with a cigar outside the King Corona cigar in Ybor on the last evening.

Mike Lopez said he did not have a problem with health warning labels on the cigar, if that’s what the Food and Drug Administration imposes. This, he said, would not change his custom to smoke a cigar once in two months. “It does not hurt to put a warning sign:” Mike Lopez said. “It’s actually not a limitation. This is a warning.” But he does not want the federal government to adopt rules for the future, he said.

“If you do not like it, you do not have to put the cigar in his mouth,” he said. “I feel like cigarettes are much worse.” Don Barco, who owns King Corona Cigars, said the industry is already doing a good job of regulating itself. He said his store employees “ID who looks younger than 30 years.”

Philip Morris: Additional revenues up to 9.6% at 7 months, plus dividends

Philip Morris International (PM) is trading near 52-week high. If you look at the two years following table you can see it usually experiences some kind of a setback after trade to new highs.

The graph shows that Philip Morris repeated this pattern several times over the past two years, and it appears that the potential to do it again. It also has a fairly strong support in the 80-83 range. The following strategy can be used to take advantage of this situation. Please note that you need to have a reserve, as the first part of the strategy entails selling covered calls. If you do not own stock, you can implement the second part of this strategy.

Before we get to the point of this strategy, let’s look at some of the benefits associated with the sale of puts and covered calls.

The advantages of selling covered calls

  • Income generation
  • Two. Downside protection and reduce the volatility of the portfolio
  • Three. Pre-yield
  • Conversion of ordinary shares in payment of dividend shares
  • Investors looking for more detailed information about the benefits of selling covered calls can read our work on the “Benefits Covered write strategy.”

The advantages of selling naked put

The investor usually sells the option, if his / her perspective on the main bullish security.

  • In essence, you pay for putting “limit order” for the shares or stocks, you would not mind owning.
  • It allows you to earn income in a neutral or growing market.
  • Acquisition of shares in a short put strategy is widely used, many retailers, and is considered one of the most conservative option strategies. This strategy is very similar to the covered call strategy.
  • The safest option is to make sure the set is the “money provided.” It simply means that you have enough money in the account to purchase a particular stock if it trades below the strike price. Your final price will be a little bit lower when you add the premium you were paid in advance in the equation.

Every day you arrive at the decay time as long as the stock price does not drop significantly. If it falls below the strike you sold a put on, you get to buy the shares you want at the price you want.

The proposed strategy for Philip Morris

Part I

Jan 2013, 95 calls are currently trading in the range 2.33-2.41. The sale of these calls at $ 2.33 or higher. In this example we will assume that the calls are sold for $ 2.33. For each contract traded, $ 233 will be credited to your account. We sell covered calls and calls are not naked, so you have to have this stock in order to be able to put this part of the strategy in the game. If the stock is trading above the exercise price, the shares may be revoked. If this happens, you will leave with a gain of 7.05% (4.80 and 2.33 from the warehouse of the premium you received when you sold the call). If the shares are not withdrawn, your winnings will be 2.45%.

Part II

Sell the Jan 2013, 80, puts on a $ 2.08 or higher. For each put sold, $ 208 will be credited to your account. If the stock is trading below the strike price Put sold, shares may be assigned to your account. Your final price will be $ 77.92. If the shares are not tied to your account, you’ll leave with a gain of about 2.6%.

Benefits

This strategy gives you the ability to collect two awards in addition to the dividend – one of the selling covered calls, and others from the Bond brand of cigaretes.

Possible results

Shares withdrawn, but the stock is not traded below the price of puts were sold. In this case, your gain of 9.65% was (7.05% plus 2.6%).

Shares not withdrawn, and the stocks are not traded below the price of the put was sold on. Your winnings in this case are 5.05% (2.6% plus 2.45%).

Your shares withdrawn, and the stock trades below the put strike price were sold. In this case, you will receive shares at 77.92, and you leave with a gain of 7.05%.

Your shares are not withdrawn, but the stock is trading below the strike price Put sold. In this case, you get a much lower price of 77.92, and leave with a small increase in the 2.45% of premiums received for the sale of the call.

Risk Factors

Shares may trade above the price you sold the calls. If this happens, your shares may be withdrawn. One simple way to avoid this would be a challenge if the stock is trading above the strike price, and you still want to hold on to stocks.

Another risk factor is that if the stock is trading below the price you sold puts on, the shares may be assigned to your account. It should not be a big problem, as one only sells sets when the bullish on long-term prospects for stocks. If you have a change of heart and I feel that the shares could trade much lower price, you can roll sets. You buy the puts you sold back and sell new ways in which a bit of money. Shares are usually appointed for the last trading option.

Conclusion

This strategy should be used only by those who are bullish on the stock, as it is likely that the shares may be assigned to your account. In addition, there is a chance that you may lose the shares if the stock is trading above the price you sold the calls. Investors are looking for other ideas may find this article to be interesting.

Disclosure: I have no positions in any stocks mentioned, and does not intend to initiate any positions within the next 72 hours. EPS and price schedules Vs industry, as well as most of the historical data used in this paper were obtained from zacks.com. Options table are derived from money.msn.com.

Warning: It is important that you do your due diligence, and then determine if the above strategy is suitable for your level of risk. Latin principle of “caveat emptor” (let the buyer beware) applies.