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To: patron_anejo_por_favor who wrote (65232)	2/3/2003 10:23:33 PM
From: ild	Respond to of 209892

Patron, if they are bullish then they sold strike $45 and bought strike $55, so in effect they loaned $10 to other party for 2 years. If they were European style they would even trade at a discount, but they are American, so they trade at intrinsic value. The big advantage of QQQ options is that the spread is always small regardless of price. For instance spread on SOX ITM options is from $2 to $4.

To: patron_anejo_por_favor who wrote (65232)	2/3/2003 10:57:30 PM
From: mishedlo	Read Replies (1) \| Respond to of 209892

I believe it is a bear credit spread that can not lose unless QQQ rises above 45. Sell the 55 buy the 45. Can QQQ get above 45? This deep ITM there is no time premium whtsoever. That is typical. In this regard it acts more like a short except that it is so far ITM on both sides that they can not make any money off the basic play at all. They do earn what I would consider risk free interest and have a nice huge credit to do something with if so desired. Intrinsically a huge move gains or costs them nothing but the generated cash lets them do something nice. Assume QQQ manages to rise 4 points. They can cover the short puts and play for a resumed down trend. If QQQ falls to 20 perhaps they could buy some short term ITM calls with their cash and start unwinding the short puts, which from a deeply oversold position that would insert a lot up upward pressure on the QQQ's. There are all kinds of play one could make and the size is such that unwinding it could actually move the market for a while. I believe that is the intent while in the meantime waiting for a huge move in either direction for a setup to bet the other way and unwind. M