Data Broadcasting Corp. (DBCC) Message Board

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Technology Stocks : Data Broadcasting Corp. (DBCC)

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To: Dave who wrote (2131)	1/6/1999 2:51:00 PM
From: moby_dick	Read Replies (2) of 5102

DBCC Option Play - No Lose? Someone sanity-check me on this one: Since DBCC has been volatile, the option premiums are way up. Today, I purchased 2500 shares at 17 1/2 and wrote Jun 17 1/2 calls at $6 1/8 and wrote Jun 17 1/2 puts at $5 3/8. This means I collected $11 1/2 worth of premium. If DBCC is higher than $17 1/2 in Jun, I keep the whole premium ($28K). I get diminishing returns down to a break-even point at DBCC=$6/share. If I am really worried about that, I can BUY the Jun 7 1/2 put for 3/4 and be in a no-lose situation! Can someone comment on this strategy and let me know if I am doing something wrong? It looks like a way to set up a great return. Additionally, if DBCC swings in price like it has, then I can even play the options more by buying and selling against the direction of the stock to get even more return. Comments are welcome and encouraged! Moby

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