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Non-Tech : American Wagering (BETM)
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To: Knighty Tin who wrote (4)5/29/1997 11:44:00 AM
From: Enroff   of 19
 
Mike, I enjoy your postings, they are a real education in money management. Keep it up, we love you man. (g)

Buying IGT and selling the put is an interesting idea. It, as you know, is also the same buying 2 IGT on margin and selling a call. The strategy seems geared to a low volitilty stock that you expect to have little downside and modest upside. If Steve Covin were to propose this for CPQ I have the feeling you would call it a mugs game. Looking at the chart for IGT is appears to be a rather volitile stock.
On the other side you can own the stock, get the upside and collect the put premium. If it goes down you should buy more, though unfortunately at the higher price that it is put to you. This risk is worth the put premium.

As I ramble here I may have answered my question but when should this stategy be used? and a little more insight if you have the time.

Thanks in advance.

By the way as they say on Monday Night Football "you can put the turkey in Houston there forked" does that sound right? (g)

I did pick up a 1/3 of BETM. thanks

Steve in Utah
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