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 (7)	8/19/2001 1:13:10 PM
From: PAL	Read Replies (2) of 23

What if the stock closed below 60? We will get assignment on Monday at a price of 60. Covered strangle: we have $ 57,650 cash and already own 1,000 shr of qcom. Net result: own 2,000 qcom MINUS $ 2,350 100% cash/short put: we have $ 121,400 cash. Net result: own 2,000 qcom PLUS $ 1,400 The latter is better. Conclusion: If qcom had closed below 63 3/4 last Friday 100% cash/short put is better, but if it closed above 63 3/4, then covered strangle is better. own

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