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Technology Stocks : NEXTEL
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To: John F. Dowd who wrote (3665)12/12/1997 6:50:00 PM
From: P.T.Burnem  Read Replies (1) of 10227
 
I get the part about the put and the call but why should you wind up with half if it hits the strike price on the nose.

Sorry, I should have been more clear with my terminology. My portfolio is typically comprised of 8-12 "positions" of roughly equal size (dollar-wise), for the purpose of diversification.

Sometimes, as in the case of NXTL, I buy 1/2 position and write covered calls and puts at the same strike price (in this case, $25). If NXTL closes @ $25, both the calls and puts will expire worthless and I'll keep the 1/2 NXTL position that I already own.

PTB
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