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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?


To: peter n matzke who wrote (35848)3/3/1998 11:25:00 AM
From: ViperChick Secret Agent 006.9  Read Replies (3) | Respond to of 58727
 
and how much profit do you have if it is at 115!!!!

very bearish...
IF you bought and sold equal number of calls...

sell 10 at 15

buy 5 at 5 1/2
buy 5 at 8

or buy 10 at 8

7 points made...3 points risk
buy 10 at 5 1/2... 9 1/2 made but 5.5 at risk

how do you know they bought twice as many calls ...
but lets say they did...

lets use your scenario

sell 10 at 15 =15000
buy 10 at 5 1/2= 5500
buy 10 at 8 = 8000

you could make 1.5 if the tbr is at 115 or lower...
or you can make 2 or more IF it is OVER 138 (this is from you..I didnt bother to check that)....

a VERY BULLISH scenario TO ME
is selling puts and buying calls....

your above scenario is more of a hedge and money can be made EITHER way....

but this is an interesting case to try to decipher plans and different spreads...by looking at TBR...