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Strategies & Market Trends : Win Lose or Draw : Be A Steve, Make A Call -- Ignore unavailable to you. Want to Upgrade?

To: Win-Lose-Draw who wrote (95)	2/1/2003 2:12:12 PM
From: Jeffrey S. Lillie	Read Replies (1) \| Respond to of 11447

I have been doing some reseach into hedging as a means of protecting against unexpected developments etc. One thing that i think is cool is that if you feel a good size move is coming then buy a put and call on spx for about $20. If index does indeed move over next few days the net position shows a profit. rough numbers would be one goes to 10 and other rises to 40. if then sold both for a total of 50 after investing 40 you get a 20% profit. i will have to see some real life examples to see how it plays in reality. perhaps the 40 wouldn't be so high and the 10 would be lower erasing the profit. I shall continue to dig. j