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To: Bipin Prasad who wrote (49279)10/14/1999 1:28:00 PM
From: Carl R.  Read Replies (1) | Respond to of 53903
 
Remember they are the option writer, so they collect the spread, and they collect the time value. If they match up deltas and maintain a close to 0 delta, then they do not gain or lose as the stock moves, so long as the stock doesn't move in a big gap. When the stock gaps, then they have some exposure or course, but they try to limit that too, and when they can't I expect that they raise the time premium.

Carl