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To: kaka who wrote (164776)4/17/2001 3:43:59 PM
From: stubba  Read Replies (1) | Respond to of 176387
 
I'm sorry my bad

you are right - the net credit in naked situation would not be reduced by the amount required to buy puts and calls at strikes on other side

so the actual return would be the 1.80 or so net credit for selling the naked $90 put and naked $110 call over roughly $25 (1/4 of underlying stock price)

1.80 / (98.5 /4) = approx 7.3% with virtually unlimited risk vs. the approx 25% return that limits risk