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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (31559)	8/26/1998 2:21:00 PM
From: Deep IntheMoney	Read Replies (1) \| Respond to of 132070

Mike, I did'nt do a credit spread because that would hold the $5($35-$30) cash and also my premium for every share. That happens to be almost 3 times the cash I put out. So I can do 3 times as many contracts or invest the money in some other play. As far as going long, in my example, the Sep 30 call was at $9. But with $9 I can enter three times ($3 debit/share) as many contracts with debit spreads. That means $6 profit($2/share) with the stock at 35 on expiration and 33 to break even. With the Sep 30 call(long) the stock needs to be at 39 to break even and 45 to make that same $6 profit. If the stock shoots way beyond 45 (which I am bearish about) my call buyer deserves it:). I did'nt have to hold any cash and the premium is deducted from the debit. I don't have a lot of cash and I wanted the safest position. But I could still go long on some calls at the price now. One thing though these Bull call spreads apply to high premium situations only. It is a rarity to find such spreads (DELL is one). But whenever you see them and you are bull at a price - be a matador. Mike, Is the Tlab still worth it? At what ratio do you have the position. Deep