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Strategies & Market Trends : Bonds, Currencies, Commodities and Index Futures

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To: robert b furman who wrote (9414)	2/4/2006 3:26:40 PM
From: Patrick Slevin	Read Replies (1) of 12411

I've repeatedly sold puts on stocks I wanted. Even now I sell calls on stocks I would sell as long as the tax basis falls outside the one year hold. The only butterfly I ever did was on Midlantic Bank. Made a boatload because Midlantic was taken over by PNC Bank. Normally butterflys are done almost simultaneously. Basically, if I recall correctly, you are betting on flat trading/Low volatility. As long as everything stays in a range you make it both ways as premium erodes. If it breaks one way or the other you make money because premium builds on the one side while it decays on the other. But the Time Value of Money works for you on both sides.

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