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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: NateC who wrote (11322)	8/2/1999 1:39:00 AM
From: Greg Higgins	Read Replies (1) \| Respond to of 14162

NateC writes:Dave Wright sent me a neat book, in which a very experienced fulltime options investor ( a big time one)....was comparing options investing to a poker game. He was VERY wary of buying and selling like this.....because one party.....maybe the put buyer.....maybe the put seller.....MUST INEVITABLY HAVE more information than the other one. This is so far from reality. Read the chapters on offsetting risk in the CBOE book and McMillian. I can't quote them, since I'm a few thousand miles from them, but the basic idea is that every MM has a way of removing the market risk from his trades by taking an offsetting position. Which, by the way, brings me to my other thought. Has anyone considered the possibility that the 40 puts were laying off part of the risk assumed by the buyer of the 45. I see that scenario as just a teeny bit more believable than assuming someone did a 5 point credit spread and got 4 15/16.