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Politics : Ask Michael Burke
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To: Tommaso who wrote (94980)3/13/2002 2:52:49 PM
From: Tommaso  Read Replies (1) of 132070
 
At the other end of the scale from the December 2003 puts. strike 140, on the Dow are the December 2003 strike 64 calls.

Those calls cost about 4% more than their intrinsic value, whereas the puts are about 10% less.

Someone with the money to do so could put in a straddle with those extremes and be guaranteed about 6% (before commisions) over the next 20 months: slightly better than current money-market rates.

I might think about doing something like this instead of just selling, if I should have a big profit on my puts. There might be some tax advatages if you did it right, too.

But no doubt the pros have figured all this out already, and probably the only way I can make real money (as I did last year) is to stick with the short side.
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