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Strategies & Market Trends : Advanced Option Strategies
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To: Joe Waynick who wrote (345)7/6/2001 4:19:55 PM
From: Allen Furlan  Read Replies (1) of 355
 
Joe and Rose. A little kicker to your excellent discussion. You can sell naked puts using short term treasuries as collateral. At Brown the treasuries have to mature in less than one year and must be at least 50K. Currently I am naked dtpi,mwy and ibp puts. Rationale is that T's are immediately convertible into cash, ie a cash covered sale. Selling out of money puts on solid companies is much less risky than owning stock.
P. S. has anyone seen discussion of option adjustments for situations such as ibp, ie tyson first seeks tenders and then does stock conversion. Normally options are adjusted to default position in cash stock deals, ie take on characteristics of non electing shareholders. But in case of ibp out of money calls and puts still have value so it is hard for me to predict what the adjustment will be.
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