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Strategies & Market Trends : Option Spreads, Credit my Debit -- Ignore unavailable to you. Want to Upgrade?

To: jjs_ynot who wrote (550)	2/15/1999 10:46:00 PM
From: KFE	Read Replies (1) \| Respond to of 2317

Dave, Doing middle of butterfly at open and then buy the other halves at the close. If you guessed right on direction of market this would work fine, but why not just unload position from the opening at a profit. Caution- you would have to be aware of margin consequences because you would be considered naked on the opening position. Butterfly's are not done because you want to play a particular direction in the market. Do butterfly for two reasons 1. You think that you know a price range that a stock or index will be in at expiration (not so easy). 2. Take advantage of pricing discrepancy between strikes. Easy to spot but rare and temporary. Ken