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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?


To: HF who wrote (6560)1/26/1998 8:07:00 PM
From: Greg Higgins  Read Replies (1) | Respond to of 14162
 
HF writes: give us an example of why you would do the short straddle/long versus buying protective puts.

The stock is CCI, closing price 114 1/16.

Sell Feb 115 Call, Sell Feb 115 Put, Buy Feb 120 Call, Buy Feb 110 Put. This is called a Butterfly spread. It's a short straddle / long combination. Both writes are technically naked; but I believe the maximum margin requirement is $500 + premiums.

Use the prices from
cboe.pcquote.com .

Do you see my point now?