Option Spreads, Credit my Debit Message Board

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Strategies & Market Trends : Option Spreads, Credit my Debit

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To: jjs_ynot who wrote (521)	2/13/1999 10:29:00 PM
From: NateC	Read Replies (2) of 2317

Dave...I'm talking about let's say American Power Conversion APCC is at 38. ( I don't even know if there are options on it..it's just an example). I might, next Friday, sell the March 40 call AND Sell the 35 Put..(or depending on chart & volatility, maybe the 32.5, or 30 Put) I could do this naked or covered..either way I pocket the premium....if it's covered..it's just a covered call, and I have to watch the downside...and buy back the put, if the stock goes down....or exercise it at a good price ($38 - the two premiums I collected). Naked, of course it's a little more scary..... I'd probably buy a farther OTM call, cheap, to protect the call I sold if I did it naked... If I did the same thing to protect the sold Put....I guess they'd call that a butterfly spread....just wanted to know if this is the kind of spread we might consider in this forum....or if you just want bull or bear, put or call.....spreads

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