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  • Add You - MER Chart – Collar Example #4

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    f the
    trend and although it stays within the trading channel nicely,
    this still is a volatile trading pattern.

    Conclusion: With vol
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    NOTES ON Merrill Lynch (MER)
    Collar

    1) During this viewing period, Merrill trades in an uptrend from
    late June 2003 at a price of about $45.00 through January 2004
    with a high around $60.00.

    2) This is a wide trend with some intra-month ranges as much as
    $5.00 and $6.00 wide, indicating a volatile trend.

    3) There were a few gap openings early on in the uptrend during
    July, but we also want to look at the large intra-day ranges,
    displayed by the length of the daily candles.

    4) The stock also deviates frequently from the mid-line of the
    trend and although it stays within the trading channel nicely,
    this still is a volatile trading pattern.

    Conclusion: With vola
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    bout $45.00 through January 2004
    with a high around $60.00.

    2) This is a wide trend with some intra-month ranges as much as
    $5.00 and $6.00 wide, indicating a volatile trend.

    3) There were a few gap openings early on in the uptrend during
    July, but we also want to look at the large intra-day ranges,
    displayed by the length of the daily candles.

    4) The stock also deviates frequently from the mid-line of the
    trend and although it stays within the trading channel nicely,
    this still is a volatile trading pattern.

    Conclusion: With vol
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    d $6.00 wide, indicating a volatile trend.

    3) There were a few gap openings early on in the uptrend during
    July, but we also want to look at the large intra-day ranges,
    displayed by the length of the daily candles.

    4) The stock also deviates frequently from the mid-line of the
    trend and although it stays within the trading channel nicely,
    this still is a volatile trading pattern.

    Conclusion: With vol
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    k at the large intra-day ranges,
    displayed by the length of the daily candles.

    4) The stock also deviates frequently from the mid-line of the
    trend and although it stays within the trading channel nicely,
    this still is a volatile trading pattern.

    Conclusion: With vol
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    f the
    trend and although it stays within the trading channel nicely,
    this still is a volatile trading pattern.

    Conclusion: With volatility high, option premiums will probably
    be expensive. In Merrill’s case, the investors should look to
    obtain maximum protection, but the protective put would not be
    the best choice.

    Although the stock is very volatile, the uptrend is not a steep
    one. During the observed period of 6 months, the trends mid-line
    capital appreciation is only a little more than $6.00, not much
    compared to many other stocks during this period. With the high
    volatility, the price of a protective put for any length of time
    would quickly eat away any profits from the sto

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