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Strategies & Market Trends : Advanced Option Strategies

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To: EJ who wrote (205)	9/10/1998 8:24:00 AM
From: RBane	Read Replies (1) of 355

EJ, I like your explanation, but, I think a far superior play would be to sell the IMNX SEP 55 C @ 6 5/8 and buy the SEP 65 C @ 1 11/16. Maximum profit is 4 15/16 and maximum risk is 5 1/16. Selling options when the stock is close to the strike price is beneficial since, as we all know, the time value is maximized when the stock is at the strike. In the 55 call option case, of the 6 5/8 premium, 5 3/4 is time value and only 7/8 is intrinsic value. I'm interested in hearing your thoughts on this. Good trading, Ron

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