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Politics : Formerly About Advanced Micro Devices
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To: Petz who wrote (102684)4/6/2000 7:06:00 PM
From: Charles R  Read Replies (2) of 1575622
 
Petz,

<Short calls+long puts+long stock is a totally neutral position.>

This is true.

<This makes me think that the market maker sold April 55 calls and bought AMD stock to convert his bearish position (long puts) to a neutral position. >

You may be right but this doesn't make sense to me. It is conceivable that this was a part of much more complex trade but I am having a problem seeing 55s as the neutralizer. May be you can explain how neutrality can be achieved with the scheme that you mention. How can shorting a 55 call help? I can see 65 but 55?

May be you can start with telling the premium (discount) to par when you picked up the 55s. And then do the math from there.

Chuck
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