Option Spreads, Credit my Debit Message Board

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Strategies & Market Trends : Option Spreads, Credit my Debit

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To: mozoneman who wrote (1904)	1/16/2001 9:27:54 AM
From: KFE	Read Replies (1) of 2317

Huan, HAND reports after the close. I exited half my position when the spread doubled about 10 days after entry. For a calendar spread to double (it actually went higher) in such a short time is highly unusual but the underlying moved quickly towards the short strike and the IV skew reached an unbelievable number of 60. The underlying has moved significantly since then against me but the remaining contracts could still be exited at a profit. If I were still in the entire position I think that I would probably exit sometime today. Due to the limited dollar risk still left ( put on for average of 1 1/8) I will probably hold the remaining contracts through earnings. Much more profit potential with a down move than risk with an up move. This will give me mixed feelings because I like to short the stock and it would create a nice opportunity if it ran up after the earnings announcement. The holiday season season numbers might make the revenue (not earnings) figures look good but this stock is grossly overvalued any run up will create shorting opportunities. Of course this does not mean that it cannot become even more overvalued. Regards, Ken

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