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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Richard Nehrboss who wrote (83501)	9/7/2000 1:41:24 PM
From: Knighty Tin	Respond to of 132070

Richard, I think we are on the same page here. It is not a standstill 12%. It is a most likely 12% or a lot more. The trick is not the standstill rate, as the fungibility of the positions work in your favor. For example, if you buy Vertical Net at $$53 and sell a Jan 2003 leap struck at $60 and buy a $40 strike price put, you end up with a net premium of $12 1/2 for less than 29 months. That is about 12.7% standstill. However, if Vert goes up, you also have 7 points of capital you can collect. And if it goes down, the premium pickup on the put protects you and is even likely to reward you. However, I would expect to trade that position several times prior to expiration, nailing much more than 12% net net.