|
PureBytes Links
Trading Reference Links
|
In a message dated 97-05-29 19:14:17 EDT, you write:
<<
Could I ask your opinion on the following trade? I have never put on a
spread of this kind before.
Sell 1 Dec Corn 250 put @ 14.00¢
Buy 2 Dec Corn 240 puts @ 8.75¢
Debit 3.5¢
Philip
>>
You must be looking for CZ7 to go below 224.5, because that is the only way
for you to profit on this trade. And it would only be on one contract or put,
since
the buyer of the 250 put will want the contract (forcing you to give up one
of the
240's you purchased) since Corn will be below it, giving him a profit if he
buys a
contract of corn below 250!
My calculation is: 10 = $500 Loss to make up from the sale of 250 put
3.5 = Cost of Trade
2 = Commissions Cost
----------
< 15.5 > Total Cost
Subtract this from 240 and you have 224.5 for Corn to reach before you make
anything. And what if it stops or reverses between 240 & 250 ? And your
buyer
wants his contract at 250? Unlikely -- Yes! But not good money mgmt.
Am I looking at this Right? How did you see it?
Have you looked at the July\Dec CORN Spread ? My objective is 30 - 50 Prem
July. FND: 6/30.
Best Regards
SRR/arr
Without Prejudice
******************************************************************************
******************
Survive Financially, Eliminate Estate & Probate Taxes, Real Judgement
Proofing,
Shelter from Creditors and Bankruptcy, Ultimate Asset Protection. Email,
Subject-Info, to OffShrTrst@xxxxxxx , Or > http://www.pill.net < and Use
Sponsor # 1028.
******************************************************************************
******************
|