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Technology Stocks : USRX
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To: Janice Shell who wrote (17108)3/28/1997 7:53:00 PM
From: Glenn D. Rudolph   of 18024
 
I think (think) that if you sell 1000 contracts of USRX April 75 calls
and simultaneously (or rather not quite; one transaction will be made
before the other) buy 1000 contracts of USRX April 75 calls, you will
effectively have closed your position. That is, I suspect you just can't
do this. If you want to play both sides of the fence, I believe you'd
have to buy (or sell) both puts and calls.

David and Janice,

It is in violation of the SEC to be on both sides of the same position. Thus, if you sell 1000 contracts Of April 75 Calls which is an open contract order and then try at anytime to Buy 1000 contracts of April 75 calls prior to expiration as an open contract order, the second trade will not execute. The option market will come back with a request that you change the buy to state close contract. In which case, you closed the position you just opened. Obviously, a straddle is different with puts and calls at the same strike price since they are not the same derivative.

Glenn
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