What’s My Option?
Thursday, May 26, 1988 - THE CHARLOTTE POST
^ r Options play an Important
- -role in many of the proposals 1
write. Such was the case in an
Investment summary I devised
for a new client recently. As we
sat in my office I watched my
"customer feverishly ponder the
' material. A long period of sl-
- “ lence ensued before he turned
the Investment folder back to
' me. "1 like all of these sugges
tions, Mr. Butts. So why are you
asking me to write more op
tions?" He pointed to the propo
sal highlights. "I thought you
^ considered the best alternatives
^"'for me before you prepared this
proposal." At that moment 1
knew I'd be spending some time
explaining options to that man
before we could go any further
■with the investment summaiy.
" For all of you who have heard
• of "stock option" and think that
'It means "stock alternative," this
is the explanation I gave him.
An option is a legal contract
that gives you the right to buy or
sell a given number of shares of
stock (usually 100) at a specified
price within a certain period of
time (usually nine months or
less). An option becomes worth
less if it expires prior to its exer
cise or sales.
Investors may purchase either
call options, which convey the
The Financial
right to buy a specified quantity
of stock, or put options, which
convey the right to sell a speci
fied quantity of stock.
The advantages of buying call
or put options can be summar
ized as follows;
• Leverage: A small percentage
move in the price of the underly
ing stock you have optioned may
result in a relatively large per
centage gain.
• Reduced Cost: The option
buyer can participate in the
movement of a stock for a frac
tion of the cost of actually buy
ing an equivalent number of
shares.
• Limited Risk: Risk is limited
to the amount originally invest
ed in the option, regardless of
North Carolina residents de
nied Social Security disability
benefits from mid-1981 through
mid-1987 could get new hear-
; ings or reviews of their claims.
But to benefit, individuals
■^fnust contact their local Social
-“Security Office and ask for a re-
■vlew under the Hyatt v. Bowen
, class action lawsuit
A recent Federal court ruling
' from Charlotte in the Hvatt v.
, Bowen case ordered the Social
, Security Administration to re-
; view the cases of North Carolina
■ residents denied Social Security
or Supplemental Security In
come disability benefits. The
ruling applies to denials made
in most claims during the period
from mid-1981 through mid-
1987.
More than 75,000 North Caro
linians may be eligible for the
new hearings or reviews—and
tens of millions of dollars in ret
roactive benefits are at stake.
On March 10, 1988, Social Se
curity mailed notices to thou
sands of persons who may be el
igible to have their claims
reconsidered. However, one
need not receive a notice to be
eligible.
Individuals who meet the re
quirements of the court order
are entitled to have a new deci
sion made in their cases under
new disability evaluation crite
ria,
if you believe you may be eligi
ble for a new hearing or review,
immediately call or visit your lo
cal Social Security Office and
ask for a new review under Hvatt
V. Bowen.
For more information, contact
the Disability HOTLINE at the
North Carolina Disability Infor
mation Office (1-800-638-6810).
Information may also be ob
tained from local offices of Legal
Services.
Leatherman
Hubbard
Johnson
Charlotte Car Dealers Make Black Enterprise Top Sales List
The Charlotte car dealerships of SAM JOHN
SON, OMAR LEATHERMAN AND REGINALD
HUBBARD were named to Black Enterprise mag
azine's Top 100 auto dealerships. Johnson's Lin-
col Mercury Merkur, located at 5201 E. Indepen
dence Blvd. ranked No. 6 with sales listed at
$38.7 million sales. Ranked No. 23 on the list,
Leatherman's South Boulevard Chrysler Ply
mouth, located at 7725 South Blvd., had $24.3
mUlion in sales. Hubbard's dealership, Metroli-
na Dodge located at 8525 South Blvd., in busi
ness just over one year, ranked No. 62 with sales
of $15.9 million. The Top 100 auto dealerships
will appear in the June issue of Black Enterprise
magazine.
Let's get started i'
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: McDonald's
^ One-On-One
J One-On-One with D.G. Martin
J this week will feature John
i McDonald, owner and operator
; of McDonald's Cafeteria and
* McDonald's Best 'Western Inn.
; One-On-One weekly features
Z outstanding citizens of the Char-
i lotte community. Martin, the
J host, said, "I asked Mr. McDo-
? nald to join me on my show be-
S cause he is one of the most im-
« portant people in this
* community and very few people
* have had the opportunity to visit
^ with him.
Z "On my program Mr. McDo-
” nald reveals some secrets of his
» unparelleled success. More im-
V portantly, he talks very proudly
* about his past and his vision for
e the future.
One-On-One with D.G. Martin
§ can be seen on Cablevision.
J chaimel 3, Friday, May 27, at 8
* p.m.
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(Leave message at office) Additional ^vings
moves in the underlying stock.
Options can also help protect
capital. Puts can be purchased
to protect profits In stocks
which investors o'wn but do not
presently want to sell. If an in
vestor feels that a stock's pros
pects are presently weak but fa
vorable over the long term, the
purchase of a put limits any
possible loss during Its life
without eliminating the chance
to benefit from a stock price
rise. The Investor consequently
receives downside protection
with an opportunity for appreci
ation.
Selling call options on owned
stocks Is referred to as "covered
writing" and should be consid
ered by investors who want to
maximize the return on their
stocks.
The potential benefits of cov
ered writing are: an increased
return on the current portfolio;
immediate cash income beyond
regular dividends; and reduced
downside risk in owning com
mon stock.
If you have any questions
about options or other invest
ment tools, please direct your
letter to Marcus Butts, c/o The
Charlotte Post, P. O. box 30144,
Charlotte, N.C. 28230.
The
Charlotte
Post's
Interest Rate Trends
Type Rate
Term
5/18/88
5/11/88
4/20/88
2/17/88
IMme Rate
9.00
9.00
8.50
8.50
Dean Witter CD
1 yr
7.70
7.75
7.55
7.10
Dean Witter CD
5 yr
9.00
9.00
8.75
8.25
T-Bills
3 ino
6.28
6,45
5.99
5.88
T-Bills
1 yr
7.33
7.32
7.02
6.67
T-Bonds
30 yr
9.29
9.22
9.02
8.49
GNMA (lOyrAvgUfc)
10.41
9.94
9.65
—
Local Stocks Of Interest
s/24
5/17
52 week
Volumes
Dividend
Sym
stock Name
Eze
Cloee
Close
Chg
High
Low
Close
AVG
PE
Amt$
Yld%
BLS
Bell South
NY
39.63
39.00
0.63
42.25
35.75
3145
3831
11.59
39.00
5.96
CCBF
CCB Financial
OTC
32.50
33.75
-1.25
35.50
32.75
21
10
9.32
34.00
3.82
CAO
Carolina Freight
NY
22.63
22.00
0.63
30.63
18.00
258
317
23.09
22.50
2.39
COKE
Coca Cola BoU'g
OTC
28.75
31.75
-3.00
31.75
20.25
35
454
0.00
31.50
3.06
DUK
Duke Power
NY
43.13
42.88
0.25
49.00
42.25
756
3165
9.73
42.75
6.49
FDD
Family Dollar
NY
10.38
10.63
-0.25
14.38
8.50
445
591
11.79
11.50
3.09
FIX)
Fleldcrest Can
NY
16.38
17.50
-1.13
24.63
14.25
89
204
0.00
18.50
4.15
FUNC
First Union
OTC
21.75
21.25
0.50
22.88
19.25
760
3614
8.53
21.13
4.05
FW
First Wachovia
NY
3a38
37.25
-0.88
39.88
33.38
281
391
10.67
38.00
3.74
FDLNB
Food Lion
OTC
11.63
12.00
-0.38
13.50
10.38
239
1045
40.09
12.00
0.52
IBM
IBM
NY
109.25
110.13
-0.88
124.00
104.25
9009
10356
12.21
110.88
4,03
JP
Jefferson Pilot
NY
30.38
29.25
1.13
34.50
25.75
418
400
13.15
30.63
4.21
LNCE
Lance. Inc
OTC
17.25
17.88
-0.63
20.00
17.25
118
527
14.62
17.88
3.71
NCB
NCNB
NY
20.63
20.63
0.00
22.50
17.50
737
803
9.46
21.13
4.46
NUE
Nucor
NY
37.75
39.63
-1.88
44.25
36.75
264
482
15.79
37.75
1.06
PNY
Piedmont Gas
NY
21.25
21.50
-0.25
24.50
19.13
143
171
8.30
21.63
6.96
RJR
RJR Nabisco
NY
47.25
44.88
2.38
53.50
44.00
7287
5754
9.54
47.50
4.06
RSTO
Roses Stores
OTC
9.25
8.50
0.75
12.25
7.75
6
64
11.25
8.50
2.27
RDK
Ruddick Corp
AM
18,25
18.00
0.25
19,75
15.75
41
99
10.55
19.63
1.75
S
Sears
NY
34.13
34.25
-0.13
39.88
32.25
4025
5467
8.38
35.50
5.86
SONG
Sonoco
OTC
26.75
27.50
-0.75
30.00
19.50
263
524
17.15
28.25
0.56
SMI
Springs Ind
NY
28.88
30,25
-1.38
38.75
27.50
67
139
9.00
33.50
0.35
SNW
Stanwood
AM
a25
6.75
-0.50
9.13
6.13
3
26
0.00
6.25
STN
Stevens (JP)
NY
67.88
67.88
0.00
68.88
28.00
104
357
19.90
68.25
u
US Air
NY
30.38
31.25
•0.88
39.00
28.00
817
1716
7.50
33.63
0.40
Financial
Updates
Small Business Loans Promote Economic Growth
New Hearing On Social Security Benefits
During the first half of fiscal
year 1988, twelve small busi
ness loans were approved in
Mecklenburg County totaling
$3,299,100, according to Gary A
Keel, District Director of the
Charlotte District Office of the
U.S. Small Business Adminis
tration.
Statewide, 130 small business
loans were approved from Octo
ber 1987 through March 1988
totaling over $28.8 million. The
loans, which were made In 44 of
the 100 counties in North Caro
lina, helped small businesses
create jobs or retain employees.
Tills represents a 35% increase
in the number of loans and a
70% Increase in the dollar
amount over the first half of fis
cal year 1987.
Small business is the key to
economic growth in North Caro
lina," noted Keel. Last year em
ployment In small business
dominated industries In the U.S.
grew by 2.9%, almost eight times
the 0.4% rate of growth In large
business dominated Industries.
Any small business or Individ
ual interested In SBA financing
should contact their local bank,
or the Charlotte SBA Office at
222 S. Church Street, Suite 300,
Charlotte, North Carolina
28202, (704) 371-6563,
Befoie%u
9iop For
ANewC^
GetBdk
w
. ■
CallNCNBForA Pre-Apptvued Loan.
Before you make tracks to the dealers, call us to get your loan
underway And we’ll call you back with the amount your loan is
approved for.That way, you can really wheel and dek Because your
loan is already in place, and you know exactly what you can spend.
Because we want to be the best bank in the neighborhood,
you’ll find us easy to talk to. So, get on the
horn and call your nearest NCNB office. f |k
Or, call Phone-A-Loan at l-800-342-9701f 1^1
Loan Advice That’s Right On The Money.
NCNB National Bank. MemherFDIC. ' Call .Monday-Fnday 8.30 a.in.-5:30 p.m. In Greensboro, call 855-NCNB.