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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (65220)	2/3/2003 8:47:19 PM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 209892

They got a spread of 10 bucks between the buy and the sell. They can't lose on this if they hold to expiration, and if the QQQ closes above 55, both strikes expire worthless and they keep all 10 bucks. If it closes at 45 or less, they break even. From 45 to 55 they make a point each point the Q's rise. It's a bullish bet, to be sure, but not as bullish as simply buying the 45's outright. It's a riskless entry, since they get the cash up front. What makes it work is that the premium on the 55's should have been at least a buck or two higher by Black-Sholes, I'm not sure how they managed to get the price so close to 10 bucks apart!