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Technology Stocks : Apple Inc.
AAPL 273.85+0.5%Dec 24 12:59 PM EST
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To: Sam Scrutchins who wrote (21542)12/31/1998 5:51:00 PM
From: Don Troppmann  Read Replies (1) of 213177
 
> Maybe someone else will respond and explain to us what 'spreading the put options' means.

This strategy is generally considered a slightly bullish, mostly neutral strategy. Also called "calendar spreads". Investor sells a near-term put option and buys a longer term put option, both with the same strike price. If the underlying stock price increases at the expire date of the near-term put the put expires worthless and the long-term put position decreases in value. Close the long-term position and take the spread as the profit. Loss potential is limited to the original difference in the net cost of opening the short-term and and long-term positions.

Hope this is helpful.

Don T.
(a long time viewer of the action and an 18 month Apple long)
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