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To: Big Dog who wrote (12435)	2/22/1998 5:05:00 PM
From: The Perfect Hedge	Read Replies (2) \| Respond to of 95453

Big Un- how much cash need you have in your acct for that there trade? The Kook.

To: Big Dog who wrote (12435)	2/22/1998 5:29:00 PM
From: dealmakr	Respond to of 95453

Big Dog, Looking at your play if you sell the 30 puts and buy the 35 calls for even money minus commisions. Downside risk starts @30 point for point. Between 30-35 is flat. Over 35 point for point on your calls. If the stock spikes you may get your price on the upside for your calls, but if it tanks it doesn't leave any room on the downside as your put sales premium have been used to open your call position. It is a very bullish option play on the stock IMO. Good Trading Dave

To: Big Dog who wrote (12435)	2/22/1998 5:41:00 PM
From: William L. Oppenheim	Read Replies (1) \| Respond to of 95453

The Middle East uncertainty will not go away. In fact it may well intensify. Saddam will claim victory, of course, and in fact he will have won this episode. He will agree to a settlement, but will not stick by it just he has not stuck by the one forged at the conclusion of the Gulf War. Why should he. No one appears to have the will to stop weapons of mass destruction in a place that has shown it does not hesitate to use such weapons. Unless we really end up destroying his capabilities, he will continue to be a problem with all the attendant headlines for the forseeable future. In fact he may be more of a prolem with the oil embargo released, his military financing replenished, and his position bolstered by the political win among the Arabs sympathetic to his call. The market dislikes uncertainty, and will thus continue volatile, and difficult to predict. Your straddle is a good bet in a volatile market when you don't know which way things will break, but the third possibility is that there will end up being little change. Then you are out the premiums or at least commissions on both ends. Also, the unraveling of this position in a volatile market may not go as expected either. But don't listen to me too much as I don't do options, and therefore am hardly an expert. Just my two cents.

To: Big Dog who wrote (12435)	2/22/1998 8:54:00 PM
From: SJS	Read Replies (1) \| Respond to of 95453

BD, Mind if I chime in here? 1) Where's your downside protection? Selling puts AND buying calls mean you participate twice in the profits if the stock is going up. If it goes down, you lose twice (your long calls get cheaper and short puts get more expensive AGAINST you). It's a very bullish spread and you have to be right in the stock direction. 2) With that size trade, I would hedge with some protection and buy some March 25 strike puts for possibly half the position. Sure, you outlay some dough, but you prevent catastrophic meltdown that could cost you big. 3) The timeframe from Feb to March is a short one. It's usually 5 weeks between monthly contract expirations. This one just happens to be 4. You've got a week less time than normal. 4) Where did the 25 1/2 number come from? Are you factoring other trades that you haven't told us about? You're downside protection is non-existant, as I said, you have no hedge, just a double long position. 5) Here's what happens with the stock at 29: a) Your 93 long calls at 35 are worthless b) someone puts 9300 shares to you, and you're out 9300 bucks (9300 * $1) for a while. If you think the stock will be at or near 35 by the third week in March: 1) Do a hedge by selling the March 35 puts, and hedge this by buying the March 30 puts to protect your downside. If you're ballsy, you could leg into it (do one side and hope the trade goes with you to juice the profits before you do the other), but I might do both side of a large trade like this at the same time. 2) Buy X number of long 30 calls, and sell the same number or some portion thereof in short 35 calls. 1 and 2 are a little different in "flavor". 1) takes in money (net cash inflow), 2) expends (net cash outlay). However the profit for the each type is known when you make the trade. There is no infinite upside, or downside if you make your hedge perfect. If you sell a partion hedge, than you participate above 35 on #2. Have fun.

To: Big Dog who wrote (12435)	2/22/1998 11:59:00 PM
From: davep	Respond to of 95453

BD,a bullish trade on a bearish sector.You've stated your poten. gains-You should think about your potential losses.If youve gotta do it how bout reducing your size?Personally i dont think fgii will be busting out of 22-35 range soon,i think its had a run up here and will probably be spending most of its time retracing.I think it will be spending most of its time below 30 which would lose you 14k on the calls and god knows how much on the puts.Btw while fgii is under 30 those 35calls will be melting also your put losses will kick in below 28.5 not 25.5.This is a crap shoot that can be done on small size but why bother with poor odds,forget the size youre talkin bout-you only win if fgii goes above 35 in the next few weeks -a long shot.