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Strategies & Market Trends : Option Spreads, Credit my Debit
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To: NateC who wrote (468)2/4/1999 6:45:00 PM
From: dealmakr   Read Replies (1) of 2317
 
Roger,

Sold 105 puts
Bot 100 puts

Ron said max loss = 5 points - premium recieved - comish. That should be about correct. One thing to consider if you hold to exp. is if the stock is 100 or below make sure that you tell your broker to exercise. This will hold the loss to the above. If your broker doesn't exercise and the stock gaps down the following monday additional losses may occur. Usually the exercise is automatic if the option is 3/4 of a point IN the money, not at the money. Also if the stock closes for example at 101, your long would expire worthless and you would still be put the stock at exp. You can also elect to go short the underlying equity if things turn around and you want to lock in a possible smaller loss, but you have to have market timing to be able to do it.

Good Trading

Dave
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