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Strategies & Market Trends : Trading the SPOOs with Patrick Slevin!

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To: Patrick Slevin who wrote (6000)7/18/2000 2:13:17 PM
From: Gersh Avery  Read Replies (1) of 7434
 
Re the sp00/SPX arb ..

I think that it's out there big time right now ..

Now lets see .. How would you unwind something like that ..

You couldn't just let the contracts expire .. You'd be left with unhedged stock. And when you went to sell off that pile you'd be taken to the cleaners ..

So then .. you gotta unload over a period of time ..

To cover you sell stock then buy (close out) futures ..
So then, when that takes place you should be able to tell 'cause stocks would move down and the sp00 (prem) would stay up at the same time! .. just like today ..
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