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Strategies & Market Trends : Option Spreads, Credit my Debit -- Ignore unavailable to you. Want to Upgrade?

To: jjs_ynot who wrote (840)	8/17/1999 10:54:00 AM
From: Ron Lambert	Read Replies (1) \| Respond to of 2317

I don't calculate these numbers on a per day basis. I have calculated these numbers with the daily closes for the last five years worth of OEX data. I update my numbers every month or so, or after a non normal month (like last month). Given yesterdays close the market should not move more than 5% to the top side or 4.1% to the downside. So you can multiply 692.67 by 1.05 and .959 which will suggest the OEX will close between 727 and 664. Those are the limits as of yesterday. I keep track of the same numbers daily and last Tuesday the factors were 1.065 and .932 which gave limits of 708.7 and 620.2. I have three other days during the month that suggests the upward limit is near 710 at this point and that is why I am looking at the 710 call right now. I used the same process to determine 660 was a good put strike price to open a credit spread at, but I entered too soon. I easily could have received twice the credit I did with a little more patience.