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Strategies & Market Trends : Options 201: Beyond Obi-Wan-Kenobe -- Ignore unavailable to you. Want to Upgrade?

To: BDR who wrote (10)	8/10/2001 11:08:24 PM
From: Uncle Frank	Respond to of 1064

>> But it is also clear that the increased potential profitability is accompanied by risk of greater losses. It isn't a panacea. Nothing is, but some traders seem to imply as much about their favored approaches. Options traders, in particular, seem to have a love of the complex and arcane, and delight in the confusion of the uninitiated. Dan being the exception, of course <gg>. uf

To: BDR who wrote (10)	8/11/2001 12:11:56 AM
From: Mathemagician	Read Replies (2) \| Respond to of 1064

Figure 20-1 Shows the Profit or Loss at Expiration graph for a covered straddle write compared to covered call write and the downslope to the left is steeper for the straddle, meaning that losses mount faster as the price at expiration falls. I think this is what Roth was saying when he described the position as "more intense" than the stock. Is that figure created using a covered straddle write on 100 shares and a CC write on 200 shares? That would be (almost) the apples to apples comparison. M