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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures

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To: Tom Trader who wrote (4955)	9/30/1998 2:22:00 PM
From: space cadet	Read Replies (1) of 44573

Hi Tom, just cruising around and I noticed your post. "There are some interesting OEX plays that are being caused by the market volatility. The 490 calls were being bid at 20+ and the 510 calls were an ask of 9 to give one a guaranteed 1 point profit at the least and may be more if one timed it well. " I haven't played with index options before but I'm familiar with stock options. I don't understand why this gives you a guaranteed 1 point profit. The way I see it you took in 20-9=11 and you are responsible for possibly 20 points=510-490 so you could lose 9 points on the trade, or you could make as much as 11 points if they expire worthless. What am I doing wrong? I would like to learn a lot more about index options as they are the one vehicle missing from my arsenal. Thanks.

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