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Technology Stocks : Dell Technologies Inc.

DELL 133.20

+5.7%

Nov 26 3:59 PM EST

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To: prakash who wrote (32927)	3/8/1998 4:26:00 PM
From: Jim Patterson	Read Replies (1) of 176387

re: <<<I don't know if any of you have ever established a bear spread. I am thinking about starting one on monday. If I long Mar 505 at 7 3/8 and short Mar 500 at 5, I will be establishing a credit spread for 2 3/8. If by end of march OEX closes at or below 500, I will make $5 from this spread. Given the fact that S&P is at its record levels and the warnings and earnings season has just begun, I think this is a reasonable risk/reward. $5 from $2 3/8 (before commissions) in two weeks doesn't seem that bad. >>>>> First if You are long @ 505 for 7 3/8 and short 500's for $5, You have a debit spread. You paid more than you took in, Hence the debit. If you are long 505 puts @ 7 3/8 and short 500 puts @ 5, you have a debit put spread. Than means you own more put than you sold. If you expire @ 500, then you will make 2 5/8 Pre Commission. If the index goes out at 502 5/8 you break even. You are left with 2 3/8 from the 505's and keep the 5 from the 500's. Add in commisions, and I bet break even is arround 501 3/4. This is just a guess, Hope this helps. Jim Hope this helps.

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