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

To: Franco Battista who wrote (83524)	9/7/2000 11:54:16 PM
From: XBrit	Respond to of 132070

Sounds good in theory. But please let us all know if you can find a reverse spread worth playing. For all of the high-volatility (high-premium) stocks I looked at, the puts have a lot less premium than the calls, so there's no way to make money on a reverse spread (short the underlying, sell a put, buy a call).

To: Franco Battista who wrote (83524)	9/8/2000 11:11:11 AM
From: Knighty Tin	Respond to of 132070

Franco, I don't talk much about reverse conversion spreads because so few people get a large enough short sale rebate to make it worthwhile. Also, you cannot do it in an IRA, and outside of an Ira, it is much more sensible to short an at the money call and buy an out of the money call, and hold cash equal to the residual stock price. Ditto for a conversion spread where a credit put spread makes more sense. The problem with these is that many folks just won't hold the cash the way they would hold the long stock.