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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: James F. Hopkins who wrote (23118)	8/3/1998 4:54:00 PM
From: Oeconomicus	Read Replies (1) \| Respond to of 94695

Jim, same number of contracts each side unless you are really good with numbers.<g> It just seemed to me that the potential 60% return for a down OR flat market over the next 2.8 weeks was almost too good to be true, but unless one thinks we will get a very sharp reversal real soon, I can't find anything wrong with it. If we get the "capitulation day" that many would use as a buy signal, the spread's value could easily go to 40+ during the day and I'd have to consider closing out, but I'd be happiest with a steady downtrend as the time premium in the 1120s will start shrinking quickly as it moves further in the money. BTW, if you haven't been trading options for a while, your broker may not approve you for spreads, but it is actually safer, IMO, than just buying puts and calls long. Bob