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

To: Dan who wrote (83517)	9/7/2000 6:58:23 PM
From: Knighty Tin	Respond to of 132070

Dan, You don't get a huge amount of money from out of the money T-Bond or Note futures calls, but, then, this is a very low volatility investment and a long term investment. You usually get anywhere from 1-2%, depending on how far out of the money and how far out in time. That may not sound great, but on top of a hefty yield on the underlying, it is pretty good. Would I consider Royce AAA rated CEF preferreds in $100,000 chunks as a hedge for the T-Note options? Yes, no doubt about it, though my brokers would disagree. <g> For the bonds, they aren't quite as good a hedge as for the 10 years. Anyone you talk to will call this uncovered writing, but I've never had any problems with it. My preferreds follow rates, pure and simply. And, I get a tax break on them. I tend to go out 6-9 months most of the time.