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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: bull_derrick who wrote (22780)	1/22/2005 4:22:24 PM
From: kodiak_bull	Respond to of 23153

BD, Well, this is getting very confusing. OptionsXpress this morning gave me the quotes I used, but now they are showing the Jan 07 80 puts (OTYMP) at 15.1 x 15.6. Who knows, in a few hours they might show something completely different. (Again, the chain showed 07 55s this morning, but they have now disappeared; maybe this is all just a dream, or stream of consciousness . . .) The 06 series is now listed as TOLMN, TOLMO. Logically, the 80 puts should be TOLMP, but they aren't shown on my chain. Funny. Officially, the 06s are no longer LEAPS, because their life is now less than 1 year. As for the spread, my view is once you figure out what range the stock is likely to play (or what you'd be satisfied with) then you sell that strike short against your long to hedge your cost. You can sell a shorter strike (twice or more) as well if you're of a mind. In your case, since you're long the 06 80 puts, and you're looking to sell when the put is at $25 ($25 in the money or when the stock is at $55), then why not sell the 55 puts to earn premium. In your case, you could either sell an equal number of Jan 06 50 puts to earn a bit of premium, or look to sell twice, once now the Jun 60 puts for about $2.00 and then, in May, perhaps, roll them over to the Jan 06 60 or 50 puts (by that time they may have added 55 puts to the chain). I have found that if my view is a stock is going from 75 to 55, or from 55 to 75, that I am best served by using a spread trade rather than a one sided trade (long puts or long calls). Kb