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Strategies & Market Trends : 300% risk free annual return with options -- Ignore unavailable to you. Want to Upgrade?

To: Alastair McIntosh who wrote (1)	8/9/1999 4:59:00 PM
From: Keith Lenart	Read Replies (1) \| Respond to of 10

Wow... the only thing that I can say is STAY AWAY from options until you understand what you are doing. I mean no disrespect, just trying to save you (and any readers of this thread) hard earned cash. Here is the problem with your scenario. The stock must close exactly at the strike price of the options you sold for this to work. The fact that you are long and short equal amounts of stock is irrelevant. This position is a NAKED STRADDLE which CAN and WILL lose money if the stock moves away from the strike price an amount greater than the two option premiums combined. Good luck, but trust me, this IS NOT a riskless strategy (nor is any except for pure arbitrage.) Keith

To: Alastair McIntosh who wrote (1)	8/14/1999 12:40:00 AM
From: Ron Lambert	Respond to of 10

So you're expecting to get called out of both your long and short equity positions and keep the premium from selling the options? Or are you expecting to loose only one side?

To: Alastair McIntosh who wrote (1)	8/18/1999 4:00:00 PM
From: P.T.Burnem	Respond to of 10

for a 47% return. Allow 2% for commissions 45% return in four months is 300% annualized. If the (volatile) stock price remains unchanged between now and the December expiry. Of course, if the stock were to double, you'd lose ~($25-$4 1/4 - $3 3/4) = $16/share - more then the $12.5/share that you would have shelled out for the stock on margin. The strategy in question requires access to sophisticated tools and risk management techniques that are beyond the reach of the average investor, and even then there is no guarantee of success (much less 300% per annum:) PTB