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

To: KFE who wrote (1917)	1/19/2001 12:44:40 AM
From: RoseCampion	Respond to of 2317

The amount of contracts involved (over 44,000) would make it impossible to completely hedge this position in the underlying immediately Egads....44,000 contracts! And they thought they wouldn't get noticed, doing it the day before the merger?! Folk that dumb deserve jail time. If they'd only been mildly greedy, like 50-100 contracts or so, maybe it would have flown under the radar? But then their idiocy is your gain. Congrats on a great call. -Rose-

To: KFE who wrote (1917)	1/19/2001 2:57:48 PM
From: KFE	Read Replies (1) \| Respond to of 2317

Just exited the remainder of the HAND spread for a net double. Sold the Feb 30Puts- the Jan30Puts will expire worthless. The stock didn't move in the direction anticipated and was basically unchanged but the return was 100% in less than one month. The IV on the back month held up after the earnings announcement so if the stock had moved to the short strike price the return would have been 600-700%. This was an exceptional risk/reward but it shows the potential risk/reward available by trading horizontal skews. Some option books discuss trading vertical skews but I can't recall any discussing trading horizontal skews. I guess you could look at this as a positive thing because if more people did it then there would be less opportunities. One nice looking setup to watch is DELL Supposed to report earnings just prior to Feb expiration. IV is at the low end of recent range. Some skew is already present. Great liquidity-could be done in size if desired. Will be monitoring next week when March series starts trading.