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To: MileHigh who wrote (75960)	10/31/1998 11:45:00 AM
From: Chuzzlewit	Respond to of 176387

Mile High, Actually the return is considerably higher than you indicated. Since his initial transaction is coupled (i.e. he simultaneously buys the stock and sells the call) his net cash out is $61 neglecting commissions. Assuming that the price of the stock rises and he is called he will receive $65 in one month, so his return for the month is 6.6%. But here is the kicker: if you annualize this you end up with a 114% rate of return. This assumes you reinvest your profits each month in an identical opportunity. This is the maximum profit position, and is achievable only in a steady or rising market. TTFN, CTC