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To: bela_ghoulashi who wrote (487)5/19/2000 5:59:00 AM
From: bela_ghoulashi  Respond to of 10876
 
re the previous question: bland is already hedged for June with covered calls, btw...he is simply considering using some of his call proceeds to sprinkle a few nuts on top.



To: bela_ghoulashi who wrote (487)5/19/2000 7:51:00 AM
From: Poet  Read Replies (1) | Respond to of 10876
 
Hi Bland,

Good questions, all, and outside of my area of knowledge so I hope someone else here can answer you. My only suggestion is to wait till next week, when the Naz may strengthen a bit, to get a better price on those puts.

I like the nut metaphor. <g>



To: bela_ghoulashi who wrote (487)5/19/2000 8:46:00 AM
From: Eylon  Respond to of 10876
 
Hi Bland,

The crossing point for puts at expiration is:

(lower strike) - (strike difference) / ((low multiple) -1)

in your case it is 47.5 - 10/(3-1) = 42.5

so if NTAP is below 42.5 at expiration the 47.5 puts are better.
If NTAP is between 57.5 and 42.5 the 57.5 is better.
if NTAP is above 57.5 the two puts are the same (worthless).

Eylon

PS This is for expiration only it is different before that


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