Hectorite,
I think you hit the nail on the head with one exception. 2,000 options = 200,000 shares x $5 = $1,000,000 in the bank. With a $1,000,000 he could get let's say 5% annual, or $25,000 interest.
He was 1/16 off the full spread on 1/2 the order or .0625 x 100,000 = $6,250. So we reduce the $25,000 by that and come up with $19,750 to the good with the chance of making some big bucks if Compaq makes another run this fall.
Makes perfect sense to me. I've played Bull spreads before, but was never able to find one this good on the same day. So I never thought about it.
Thanks,
NW |
