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Colin,
for stocks, this would be an infrequent occurrence, unless you trade very
high-priced stocks where the strikes are wider apart. You are not accepting
much risk with this position (called a long butterfly), so you cannot expect
a large credit. No free lunch on Wall Street, except for your broker.
If you trade index options, it's a different story. In the NDX, for
instance, you can rake in more than $40 apiece, but the risk is commensurate
with that price, too!
Best,
Michael Suesserott
-----Ursprüngliche Nachricht-----
Von: caw [mailto:cwest@xxxxxxxxxxxx]
Gesendet: Sunday, April 15, 2001 22:27
An: OmegaList@xxxxxxx Com
Betreff: options question
Here's a question for options traders...
Can it ever be the case or how frequently might it occur that at the end of
a trading day an opportunity occurs to establish a position at the next open
where the net balance of a position constructed of a sold straddle and a
purchased strangle one strike above and below the straddle of the same stock
is greater than a credit of $5 ?
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