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Politics : Ask Michael Burke
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To: Knighty Tin who wrote (56249)4/26/1999 2:23:00 AM
From: Richard Nehrboss  Read Replies (1) of 132070
 
Mike,

RE: Conversion Spreads

It seems to me that the best route on these things is to sell the premium that is decaying rapidly, it sell a 2-4- month call just out of the money, and buy the slowly decaying prem. ie, an out of the money leap put. Sound right to you?

Here's an example. I'll use an splinternet stock just to annoy all.
Buy YHOO @187. Sell jul 200 call for 27. buy jan00 160 put for 36. Repeat the call sales every few months and roll up the puts when necessary.

What da ya think?

Eat at PappaDeaux's lately?(or any of the Pappa restaurants?) I miss Houston.

Richard
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