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

To: Richard Nehrboss who wrote (56310)	4/17/1999 2:26:00 PM
From: Knighty Tin	Respond to of 132070

Richard, You are right in what your collateral has to be, and if you are a speculator, that is what you would want. But, as I look at the income position, you want the majority gathering interest and the option spread as the bonus. So, the 4% plus the bonus is your return. If you hit the speculative position right, you could make 100%, but making zero doesn't seem to me to be a viable proposition. She has to have income from somewhere. Yes, I collect interest on the credit brought in, which certainly helps a bit. If you run on margin, you may not get it without negotiating, as the brokers consider the credit as a way of dampening their risk and they steal the interest. It is impossible to get zero risk on a straight trade. However, legging in to one position and then the other, I usually get a zero risk portion. Any leg is risky in and of itself, but as it is a small part of the total income portfolio, it isn't that risky. For example, if you have 10 no risk credit butterflies on, the next leg you put on is fairly low risk compared to the total. The trick is to not put them all on at the same time. I have found my old schtick of putting on the bull spread on down days and the bear spread on up days works well on these. I have found the best butterflies in the stocks I most despise: Lucent, Cisco, Dell, ClearChannel, etc. I would avoid the internut stocks as they are beyond volatile and legging may cost you a leg. You also may want to consider a discount firm that is an options specialist. Marsh, Block comes to mind. They will take spread orders while with most other discounters, you have to place an order for each piece of the spread. The full service guys will do the same, but I have found that they tend to let my spreads go unfilled, even if I am just a sixteenth off the bid ot ask on both pieces. Marsh seems to fill many in between the bid to offer due to their connections with spread dealers on the floors. I have never seen a good site for Treaury trading on the Net. There probably is one, but I don't know about it. I would look at The Chicago Board of Trade for their educational material.