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To: Knighty Tin who wrote (43943)	5/28/1999 11:30:00 PM
From: John Pitera	Read Replies (1) \| Respond to of 86076

I see what you mean Michael, I have a real options question for you. any day on the oex it seems you can write an at the money put and and at the money call, and then buy one each of the same month 3 strike in the money and capture the the time premium. Let me give you an example, I know that you have seen a lot of this. today with the OEX closing at 658.66, so I buy and sell these OEX options. I buy a Jun 645 call at the ask for 22 1/8 - it's worth 13.66 intrin. I write the Jun 660 call for the bid of 11 3/4- it's worth zero I then buy the Jun 675 put for the ask of 24 7/8 - its worth 16.34 I write the Jun 660 put for the bid of 15 1/4 - it's worth 1.34 I have paid 22 1/8 + 24 7/8 = 47.00 for my long Jun 675 put and long jun 645 call I receive 11 3/4 + 15 1/4 = 27 for the 2 at the money writes .....so my outlay is 47.0-27.0 ( the premium I get for the at the money writes) or 20.00 ....my intrinsic value captured at expiration is 16.34 + 13.66 - 1.34 = 28.66 so I will have 28.66 worth of options in 4 weeks that cost me 20 I will have made 8.66 on my net investment of 20 or a 43.3% return that if annualized by multiplying by 12 or 13 will be a nice rate of return that beats a money market fund -g- This excludes the broker commission however that should not negate the strategy just reduce the % return, probably doing this strategy once every 6 weeks would give the same premium capture and reduce transaction costs. I believe the the time premium evaporates at the highest rate the last 6 weeks of an options life. Anyway I am really very interested in your feed back on this. Many Thanks, John