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

To: Skeeter Bug who wrote (33767)	10/11/1998 5:21:00 PM
From: Knighty Tin	Respond to of 132070

Skeets, Been there, done that. I would simply buy the puts at a higher price and lock in a lower standstill return. The real risk is gapping down, which is why I use a larger name like LU where a gap down is unlikely. Of course, over the 27 month life of this thing, I would hope to be able to make up for the fact I got off the blocks poorly. But that is another good reason for not playing just one issue this way. I can step up on LU and be pretty aggressive because I have locked in several other spread conversions and spread reverse conversions (short stock, short put, buy call, but can't do it in the IRA) and butterfly spreads (buy a call at $50, sell two calls at $55, buy another call at $60) at certain winner rates and can afford to take the risk to leg in on one new position. Any one of these suckers can go sour on you while you leg in, but once you have a solid portfolio behind you, you can risk some of your certain return to try to goose up the new one. MB