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Strategies & Market Trends : Option Spreads, Credit my Debit

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To: jjs_ynot who wrote (613)	2/21/1999 7:16:00 PM
From: Mark Z	Read Replies (1) of 2317

Here's another non-index spread: Long QGCCP - CMGI Mar 80's Ask at Friday's close: 33 1/8 Short QGWCD - CMGI Mar 120's Bid at Friday's close: 9 1/2 This 'trial' is only for one month but in the 'real world' I'll be going long the June 80's and pay $10 more for the extra 3 months. If I'm called out in March, I'll net about 20% (~$40 return on a net ~$33 investment). If I'm not called out in March, I have two more months to collect premiums and maybe even roll the June 80's out to October or January 00. If CMGI reaches 130-135 in the next 2 weeks, I'll likely close out the spread and take a bit less return. If CMGI dips to the mid-80's in the next 2 weeks, I'll likely buy back the QGWCD's and look to re-establish the short should CMGI rebound. CMGI has traded in a low 80's to mid 130's range the past month or so. It closed Friday at around 109.

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