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Technology Stocks : Compaq
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To: Mike Gordon who wrote (13858)1/17/1998 10:41:00 PM
From: hpeace  Read Replies (1) of 97611
 
selling the feb 65 for 7.5 and buying the feb 50 for 7/8 doesn't dilute the returns.
plus it lowers the margin to 15,000 per 10 contracts.
it's not better in this market. anything can happen and cpq is 40.
this may your loss can only be 15points-7.5points+7/8 points per 10
contracts
it doesn't dilute the profit at all.
in fact when you calculate the margin you rate of return is increased.
the normal margin would be 40% of the 65 times 1000 for 10 contracts
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