Calls and Puts for Income Message Board

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Strategies & Market Trends : Calls and Puts for Income

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To: Bocor who wrote (5866)	2/25/2014 10:49:48 AM
From: Jim P.	Read Replies (2) of 5891

I hate paying for time value. In this case a synthetic long is created. My margin requirement is the short put requirement. If ATLS is at $40 in 2 years then I will have a short term gain of x dollars per share for the puts and a long term loss of x dollars for the long calls. Anything above $40 and I start gaining on the long call side while the gain on the short put has already been maxed out. I think $50 to $60 is not unreasonable and at $60 I would have some long term gains on the calls. No k1 hassles to deal with and 2 years gives the company time to grow into the over priced purchases of 2013. Bottom line is I hope the short puts pay for the long call position and think the trade has a much greater chance of success over 2 years than a closer duration. Jim

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