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To: John Pitera who wrote (68099)	10/12/1999 1:27:00 PM
From: Defrocked	Read Replies (1) \| Respond to of 86076

I don't play that spread. Can't be much payoff in it,given the vol. Since the volume is in the OTC Interbank, is the bid/asked a concern? Anyway, you generally get what you pay for in options, and being short options works until it doesn't, at which time you'll probably wish you'd never done it. For example, LTCM book was largely based on "convergence plays", which is also a strategy that worked until it didn't. Same with Neiderhoffer, who was short equity options, and Askins, who was short the MBS prepayment options. These guys were trying to find a "low-risk" spread trades where the odds were in their favor. (Just like most people in the stock market are now, but their spread is against the risk-free rate.) JMHO. BTW, if you have a natural exposure to the DEM/CHF, the play may make an interesting trading ax. Unfortunately, those are the guys one is usually trading against.