OPTIONS TRADING

[Gd2Aussie3]

Here's a good call.

Cigna Corp. (CI : CI) on Wednesday declared a 3-for-1 stock split, to be distributed June 4 to shareholders of record as of May 21. The Philadelphia-based healthcare company also said it is raising its quarterly dividend 20%, payable July 10 to shareholders of record as of June 12.

2-1, 3-1 and 4-1 stock splits often have pre-split run ups. Then about a week before the split it's time to sell the call. Wait until after the split and buy a short term call of a month or two. Again the stock goes up for a bit and then pulls back. In a case like Cigna's it is also then a good buy to get calls six monhts out and watch is it goes bask up . Splits have a tendency to seek their pre split levels or near it. Cigna's current price is $153.42. Prior to the split it should be around $165. Of course after the split the PPS would be around $55 per share. The stock shouldn't have much of a problem going to around $75 and settling for a while before slowing continuing its upward trend.

Something to think about.

G' day Mates,

Aussie