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

To: Dan Duchardt who wrote (792)	2/28/2003 7:56:01 AM
From: tyc:>	Read Replies (1) \| Respond to of 1064

The observation that the theta of a long term warrant we were discussing may be close to zero, is quite fascinating. It seems to me that the only cost of their cheap delta is theta, the erosion of time premium. The observation seems to be corroborated by the price curve of a different warrant that expires a year earlier. Although at a much lower price level, this warrant appears to be still trading on the same price curve.... thus, theta over the past year has probably been zero. I'm thinking of replacing common stocks with the same amount of delta provided by their warrants, and putting the freed capital to work elsewhere. There's a particularly high-yielding expiring mine that comes to mind... High yield and cheap delta on a volatile underlying, what better combination could there be ? Let me know if you would like details of these (and other) Canadian long term gold warrants.(Although I am no expert on the subject)

To: Dan Duchardt who wrote (792)	2/28/2003 12:29:58 PM
From: Dominick	Respond to of 1064

Here's an article on REG T: thestreet.com

To: Dan Duchardt who wrote (792)	2/28/2003 5:06:37 PM
From: Allen Furlan	Read Replies (1) \| Respond to of 1064

Hi Dan, my RMBS position is partially an attempt to lose money on the long side this year to offset a bunch of short term gains which occurred in Jan 2003 expiration cycle and will probably repeat in Jan 2004 cycle. I have tried to do calendar spreads using IRA for long side and margin account for short side but without success so far. Anybody have ideas on how to lose money in margin account and make money in IRA?? My SGR put position is rather iffy now with downgrade today. The company needs to redeem some of their LYONS convertibles or they will act like toxic convert. As to closing out cheap naked calls, I prefer to keep them open if yield on margin is at least 10% annualized, which means I rarely buy back naked calls on very low priced issues. FWIW a professor at Cal Tech, Edwin Thorpe if my memory is correct, wrote the definitive work that began the card counting craze in Lost Wages. His first work however was on warrant hedge strategies. Do not know if the book is still in library but it is worth a read for those interested in such subject.