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In a message dated 7/6/2006 4:41:15 PM Eastern Standard Time,
johnpretorius@xxxxxxxxxxxxx writes:
put a futures stop at the strike+premium and that takes care of another 22%
where I (normally) just lose my brokerage.
I take it that you are still short the option and then have the futures
contract that you bought cover the assigned contract once it finishes in the
money. What happens when you buy at the strike+premium and then the futures
reverses and starts heading down? What do you do then?
According to an option class I took at ThinkorSwim (and recommend), you buy
half the number of contracts that you are short, in order to get delta
neutral, instead of the full amount which puts you in a net long position.
Howard Bernstein
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