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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: OX who wrote (11337)	8/3/1999 7:08:00 PM
From: NateC	Respond to of 14162

Pardon the intrusion, this is really fascinating following everyone deciphering this possible CPQ spread play... > the MM who bought the 45's sold the 40s to lay off part of his risk It may be a little late in the day for me, but I wondering, if a specialist did do this to offset her position... who does she sell the 40's to? another specialist? In a case like this, if it wasn't a spread play, I would think the specialist would cover with shares. But I have no idea what I'm talking about, so I would love for someone to correct what I'm trying to say. also relevant to the CC thread, perhaps... If a MM bought the 45's..........and wanted to offset these by sell the 40's.....he/she needs to have a buyer. Someone needs to want all the options. That's why I made the comment about information being important. Besides a MM can lose a lot of money this way, when forced to cover.

To: OX who wrote (11337)	8/3/1999 11:24:00 PM
From: Greg Higgins	Read Replies (1) \| Respond to of 14162

OX writes:if a specialist did do this to offset her position... who does she sell the 40's to? another specialist? In a case like this, if it wasn't a spread play, I would think the specialist would cover with shares. Yes. That is my expectation, they traded off to 2 other specialists. Both McMillian and the CBOE book explain the calculation of how many shares of stock you'd need to buy or sell to maintain a market neutral position. I have neither with me at the moment.