Option Spreads, Credit my Debit Message Board

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Strategies & Market Trends : Option Spreads, Credit my Debit

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To: KFE who wrote (1410)	5/3/2000 3:03:00 AM
From: Tim O.	Read Replies (3) of 2317

Ken, I saw you on another thread discussing spreads. I used to do mostly vertical bull spreads, but because of the volatility, I often saw profits evaporate. My hesistancy in taking profits was because the net gain is only maximized upon expiration, so I usually would ride it to expiration. Also, the net gain comes from the difference in deltas on the long/short sides, so the gain grows slowly. Hope I'm clear on what I'm saying. Do you experience the same problem? I'd appreciate your strategy on profit taking on spreads. Tim BTW, I think it's great when you bring a real-life play such as CEGE. It allows for actual analysis and if it's a good play, we can all benefit from it. Case in point, I initated a bull calendar spread on SLR today. Long WRLAE (Jan02 25C) and short SLRGI (Jul 45C) for a net debit of 17 1/8. Common closed at 37 7/8. This play is intended as an income generator. I wrote the first one further out to reduce my initial cost basis.

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