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To: Patrick Slevin who wrote (12131)	11/22/2010 4:44:17 PM
From: skinowski	Read Replies (1) of 15361

LOL! Thank you, Patrick (I think... -g). And welcome back. I didn't invent that strategy, of course. Read about it over the years... probably McMillan. The same thing can be done with calls, during big declines. Would have worked beautifully in 2008-09. Another modification of the strategy is for situations when you expect the decline to be relatively small. You BUY an ATM put using the money you receive from selling a couple of OTM puts. Of course, the expectation is that the decline will not reach the lower strike. I've been thinking about trying modifications, like using different expiration dates. Let's say, in the last example the long put would expire at a later date than the OTM short puts. At some point it becomes a "free trade". I've tried something like this on a small scale, but never had a chance to really work it out.