Jill:
Thank you for your Happy Birthday wish.
The short strangle (straddle with different strike price) is doing just fine. Actually with that strategy, you don't have to worry even when CMGI came down to 71. Example using 100 shares:
Buy CMGI at $100 cost per 100 share is ($ 10,000) cash outflow
Sell 1 contract CMGI Jan01/100 put at 44, you get $ 4,400
Sell 1 contract CMGI Jan01/100 call at 46, you get $ 4,600
Cash outflow $ 10,000, cash inflow $ 9,000, net outflow $ 1,000. On Jan01 CMGI is called at 100, cash inflow $ 10,000, it is a nine bagger!
Negative: You buy another 100 shares of CMGI at $ 100/share, so you own 200 shares of CMGI at $ 55/share in Jan01. If CMGI is above 55, you make money, if above 100 you get a 9 bagger. Do you think CMGI will be a nine bagger by Jan01, i.e. $ 1,000/share from the current price? I doubt it, but with a strangle you can achieve that.
HAPPY BIRTHDAY!!!
Best regards
Paul
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