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Strategies & Market Trends : 300% risk free annual return with options

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To: Alastair McIntosh who wrote ()	8/9/1999 4:26:00 PM
From: Alastair McIntosh	Read Replies (3) of 10

An example of the strategy: Stock XXXX currently At $25.00 Dec 25 calls bid $4 1/4; Dec 25 puts bid $3 3/4 Account A: Long 2 shares, cash cost $25.00 Short 2 calls, 8.50 Net cost 16.50 Account B: Short 2 shares, margin req'd $25.00 Short 2 puts 7.50 Net cost 17.50 In four months net $16.00 on a cost of $34.00 for a 47% return. Allow 2% for commissions 45% return in four months is 300% annualized.

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