A Study of Covered Strangle in a Rather Neutral Market Message Board

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Strategies & Market Trends : A Study of Covered Strangle in a Rather Neutral Market

QCOM 168.52

-1.0%

9:30 AM EDT

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To: PAL who wrote (6)	8/19/2001 12:38:16 PM
From: PAL	Read Replies (1) of 23

What if QCOM did not close at 61.56 on 8/17/01? Covered Strangle : owns 1000 sh of qcom and cash $ 57,650 100%/short puts : cash $ 121,400 The breakeven is ($ 121,400 - $ 57,650)/1000 shares = 63 3/4. Therefore, if QCOM closed higher than 63 3/4 Covered strangle is better. If QCOM closed between 60 and 63 3/4 , then 100% cash/short put is better. The next question is, what if QCOM closed below 60 and you get a call on Monday that you have been assigned?

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