Compaq Message Board - Msg: 3004207

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Technology Stocks : Compaq

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To: Richie who wrote (11716)	12/18/1997 11:21:00 PM
From: hpeace	Read Replies (2) of 97611

richie, looks like some of the april put spreads have 3 point differnce.. the beauty of this is 1000 shares of stk has allot of risk for cpq. and margin on 1000 shares is 27k sell the april 60 put for 10 ....10 contracts buy the april 55 put for 7.......10 contracts You collect $3000 dollars. you have to put up $5000 margin only so you got 3k you only need to send 2k in to do this..not 27k. and your risk is 5k-3k is 2k.... not easily 20,000 on just a 20 point drop... read all that stuff I sent you and the books. especially mcmillain I did this pretty fast..any option guys chime in

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