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To: hpeace who wrote (11760)12/19/1997 2:01:00 AM
From: Joe NYC  Read Replies (1) | Respond to of 97611
 
Steve,

sell the april 60 put for 10 ....10 contracts
buy the april 55 put for 7.......10 contracts


but april 55 put ask is 7 5/8, reducing your max gain to 2 3/8, maximum loss to 2 5/8

How about you:

sell the april 55 put for 7 1/4
buy the april 50 put for 5

Your max upside is only slightly lower at 2 1/4, downside is 2 3/4, but the probablility of positive outcome is somewhat higher.

Joe



To: hpeace who wrote (11760)12/19/1997 2:54:00 PM
From: Richie  Respond to of 97611
 
Steve,

I understand the basics of getting into the position, but how do you get out prior to expiration and make it profitable?
I know it has to deal with buying to cover the put....
but i am a little confused.

thanks,

Richie


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