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

To: DAVID IN B.C. who wrote (1275)	8/18/1998 8:32:00 AM
From: Vectra	Read Replies (1) \| Respond to of 1598

Basically this strategy reacts exactly as to what its name implies, a protective collar, you are nervous with the position, however are reluctant to eliminate the position. You are limiting your risk at the expense of limiting your profits. Basically it locks you to approximately where you originally purchased the stock. The only risk I see here is if the stock moves beyond the call value (and you really wanted to keep the stock) there is a good chance you will get called away on them. If the price of the stock moves lower than the long put, you can exercise your put and keep the premium from the call. The most common mistake made by new options traders is that they can trade according to what their current quote screen says, don't believe it. In most instances the screen quote may give you a general idea of the current price, however don't expect these prices to stay static. Why do you believe that Canadian Banks cannot be used in an options strategy? Puts are no scarcer than calls, you can always buy an options contract (for a price), however you may not always be able to sell them. Try TSE.com for options quotes. Leaps are also quoted there. V