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To: The Perfect Hedge who wrote (11864)2/17/1998 2:29:00 PM
From: SJS  Read Replies (2) | Respond to of 95453
 
Straddles anyone?

Here's an idea with an MDCO straddle:

Sell X March 17.5 Put (take revenue of 1 3/8 points).
Sell X March 20 Calls (take 5/8 of a point revenue)

X=some quantity (if you do this straddle, X for the calls must equal the same for the puts).

Protection to 15.5 on the downside, participate to 22 on the upside.
If the stock closes between 17.5 and 20, you keep both option premiums.

An 11.4% return for 5 weeks, with the stock trading now (for the computation) at 17.5.



To: The Perfect Hedge who wrote (11864)2/17/1998 2:37:00 PM
From: Broken_Clock  Read Replies (1) | Respond to of 95453
 
Glen,
No panic yet on CDG. The test in late January was 39.50 or so. If we sell off at the end today then it may be time to sell and rebuy at lower price.I'll just hang and try and average in later today or tomorrow...maybe with some SLB calls.Check the Jan. chart. After CDGhit 39.50 the next day it never looked back.Straight up.
PK(March is a month away>g<


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