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

To: Tim O. who wrote (1399)	4/28/2000 12:30:00 AM
From: KFE	Read Replies (1) \| Respond to of 2317

Tim, if you were to do the positions today, given the % returns you computed, why wouldn't you just write 2 puts instead of the 1 long stock/short straddle? If starting from scratch I would but at the time I already had an existing long position. seems like the covered call portion is just lowering the returns. Exactly, that was the point I was trying to make. Many people enamored with covered call writing don't realize that greater returns can be generated with equivalent or similar strategies. Regards, Ken

To: Tim O. who wrote (1399)	4/28/2000 9:46:00 AM
From: KFE	Read Replies (1) \| Respond to of 2317

Tim, any particular reason why you picked october? the shorter term options would provide a higher % return. for example, Jul 17.5C = 3.5 and 17.5P = 4.5. Missed this part last night. I just used the October's for ease of example. The July's will yield a greater annualized return with a slightly higher break even point. I actually have both. I won't attempt to analyze the gene therapy drugs in the pipeline but they are potentially huge markets however none are in phase III trials yet. They have a 12% stake in Abgenix (ABGX) which has a product (XenoMouse technology)that is used by other gene companies in their research. Do your DD and I think you will like what you see. Risk/reward seems to be excellent. Options have very high premium and can be used to significantly lower risk and generate a nice return. Regards, Ken