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Strategies & Market Trends : Options -- Ignore unavailable to you. Want to Upgrade?

To: Jill who wrote (947)	1/11/2000 9:58:00 AM
From: Eylon	Read Replies (1) \| Respond to of 8096

Jill, It will not work as well with puts here's why. To be pure arbitrage play I must have the same number of bought and sold contracts after the deal. For calls the fact that TWX is both lower in price and lower in volatility work for your advantage. For puts the two are working in opposite direction. AOL puts are cheaper because AOL price is higher but AOL higher volatility bring the put price up. As of yesterday you can sell TWX puts and buy AOL puts for some pure profit because the price anomaly is greater than the volatility anomaly, but I don't know how long this will stand. If you were talking about selling AOL puts and buying TWX calls that will work only if AOL price will not go down. So it's the same as any bet on a stock to go up. Also Fido don't allows me to sell naked put but I'm working on fixing it now. Eylon