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Politics : Ask Michael Burke

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To: wlheatmoon who wrote (67589)9/12/1999 8:26:00 PM
From: zsteve  Read Replies (1) of 132070
 
RE -- RMBS option strategy

interesting strategy.
what that guy didn't say is if RMBS goes below 57 on the expiration day, every one point drop will make you lose $200 on your $400 initial investment. say RMBS is @50, loss will be $1400, @30, loss $5400, and max. loss $11400. imho, it is very possible RMBS could go under 30 at that time. but if you sell out money puts, you can reduce your risk.
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