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Strategies & Market Trends : The Options Box

QQQ 629.07

+0.5%

Oct 31 5:00 PM EST

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To: Poet who wrote (10797)	5/12/2001 2:42:38 PM
From: unctarheel	of 10876

Poet, I was just looking over some put quotes for LU. Here is an interesting one: Puts Sale Bid Ask 01 May 25.00 (LU QE-E) 14.20 pc 14.80 15.20 Of course, when trading starts next week I imagine time value of option would start to erode quickly, so probably couldn`t get 14.20. Why not sell these puts to reap some profits in a week? Then turn around and do it every month. With the stock trading at 9.95 IF one could have gotten a trade between the bid and ask on Friday, it looks like practically `free money` to me. I haven`t sat down and really tried to figure it out, but it looks that if the sum of the stock price and the premium received is within 25 cents of the strike price it would be a safe trade. Maybe your experience in this type of trading has proven to be able to accept a wider spread maybe up to 60-70 cents and it still be fairly safe. I would appreciate your opinion on this strategy.

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