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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (28538)	2/7/2003 10:07:15 PM
From: yard_man	Read Replies (1) \| Respond to of 74559

Jay, question re: >>d) Long FCX shares @ 16.99 (e) Short FCX August Call 17.5 covered @ 2.00 (f) Short FCX August Put 15 @ 1.35 << why do two equivalent trades?? -- why not just sell twice the number of puts and forget the CC position which ties up the capital for the shares? The CC position is largely equivalent to selling the put at a different price -- you could instead sell some Aug 15's and some Aug 17.5's and have a position centered anywhere you want between 15 and 17.5 -- which would be identical in profit performance to the combination of the CC positions plus the short Aug 15 puts. The risk isn't any different. Oops -- I guess there is one minor difference -- collection of the divvi -- but is that worth carrying the shares??