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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures -- Ignore unavailable to you. Want to Upgrade?

To: Nemer who wrote (25460)	6/17/1999 7:46:00 PM
From: SE	Read Replies (2) \| Respond to of 44573

I, myself, found Pat's response to be mild mannered, so I feel the urge to chunk out a few figures on this matter ...... Yes, it was, but it was a comment! Everytime I mention that theory of buying and rolling a mini, I can see Pat's hair stand on end. It is not that it is a bad theory, but the thought of the market tanking 100 or 200 spoo points while holding anything long is a bit more than can be imagined...... OK, let's reanalyze your figures...not sure why, but why not? PREM burn - 16 points per quarter, times $50, times 4 quarters = $3200 per year. Loss of money market interest. $0, cause you have to put up the money to buy the SPY so it is a wash. In fact, let's put up $10,000 flat, buy one emini and 100 shares SPY. You could argue that the other $5,000 and change on the mini could earn money market interest for the year..... But the kicker, the key is the fact that if the SPOO moves 50 points, you get 50 times $50 or $2500 for the mini or 5 points on the SPY or only $500. Heck, forget the divids commission and stuff....minor. $2500 to $500......forget about it. Done deal, buy the mini! :) Of course, this assumes an up market, but over any 10 or 20 year period the market is up an average of 10 to 12% so it is a slam dunk. Heck, over a 10 year period compounded at 10% a year this is what I get.......excel worksheet take over..... Ta Da! 10% 10% Start Emini SPY Yr 1 1,000.00 100.00 100.00 10.00 Yr 2 1,100.00 110.00 110.00 11.00 Yr 3 1,210.00 121.00 121.00 12.10 Yr 4 1,331.00 133.10 133.10 13.31 Yr 5 1,464.10 146.41 146.41 14.64 Yr 6 1,610.51 161.05 161.05 16.11 Yr 7 1,771.56 177.16 177.16 17.72 Yr 8 1,948.72 194.87 194.87 19.49 Yr 9 2,143.59 214.36 214.36 21.44 Yr 10 2,357.95 235.79 235.79 23.58 Ending 2,593.74 259.37 Total Points 1,593.74 159.37 Times Profit per Pt 79,687.12 15,937.42 Less Premium (32,000.00) - Less Commish (1,000.00) (20.00) Plus Divids 300.00 Net Profit 46,687.12 16,217.42 Just call me Air Jordon. -Scott

To: Nemer who wrote (25460)	6/17/1999 7:47:00 PM
From: peter n matzke	Read Replies (1) \| Respond to of 44573

Nemer, one thing you left out is potential risk, especially in an untradeable market. The mini obviously has more risk. I have been pondering my first scenario, and even though the upper cap was broken, it may still be in tact. Since the new nasdaq futures become available on monday, perhaps mm's brokers/dealers started to build up inventory now, establishing positions of protection etc. anyway the thought occurred that # 1 could still be possible. regards peter