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Msg  8 of 10  at  2/14/2008 10:56:18 AM  by

Enyaw


BuyWrite

There is a type of fund on the NYSE which buys shares in the S&P 500 index and then writes covered calls to supplement it. Just started in December. It's called Powershares S&P 500 BuyWrite portfolio (PBP).

Buy-Write - A trade where the investor buys stock and simultaneously sells a call against it. It is a covered-call position.

The strategy consists of holding a portfolio indexed to the S&P 500 and selling a succession of written options, each with an exercise price at or above the prevailing price level.Dividends paid on the component stocks underlying the S&P 500 and the dollar value of option premiums received from written options are reinvested.

Top Holdings:

Exxon Mobil Corp. 3.90%
General Electric Co. 2.95%
AT&T Inc. 1.96%
Microsoft Corp. 1.95%
Procter & Gamble Co. 1.74%
Bank of America Corp. 1.61%
Johnson & Johnson 1.52%
Chevron Corp. 1.45%
Pfizer Inc. 1.30%
Altria Group Inc. 1.28%


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