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Strategies & Market Trends : Option Spreads, Credit my Debit

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To: KFE who wrote (1895)1/9/2001 12:54:07 AM
From: mozoneman  Read Replies (2) of 2317
 
Ken,

Your take on the following IBM spreads is appreciated:

Two spreads are considered simultaneously, using 1 PUT and 1 CALL to bet on both directions.

Buy Feb 80, Sell Jan 80 PUTS for 1 5/16
Buy Feb 105, Sell Jan 105 CALLS for 2

If IBM fluctuates between 90 and 100 next 2 weeks, those 2 spreads should make money because the shorts expire worthless and I can sell the longs.... If IBM moves out of range, at least one spread should make money...

What's wrong with this strategy, and how can you improve on it ?

Thank you for your advice.

Huan
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