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Technology Stocks : America On-Line: will it survive ...?
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To: James F. Hopkins who wrote (3975)7/13/1997 2:34:00 AM
From: CLAUDE JOHNSON   of 13594
 
Jim,

Sorry this past me by the first time:

Your buy calls/sell short strategy is great as a bear position no doubt, but it is NOT A STRADDLE at all! If the stock goes up to the moon ... you lose 1 1/4. If the stock goes down you only make 1/4 more than the true straddle. Where is the real benefit? If you are sold as a bear for the short-term, this strategy is protected and not bad. If you are merely sold on volatility (as I am, call me a chicken!), then your transaction has no profits on a movement up, in fact you have a built in 1 1/4 loss (or take a risk and cover leaving an open call position that could lose even more if the stock heads back down).

Am I reading you right here?
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