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If the stock goes down you lose on the put and the stock and at expiration
you own twice as much stock. Is it really a good deal? Ira
Walt Downs wrote:
> Ben Wrote:
> >
> > i gues one can always learn from others.
> > joining this group alows me to give and RECIEVE good idea
> > even at 50 one can learn new treaks
> > as for the hedging.
> > if i only sell calls ,they might take my stock away
> > if the stock goes up, at least buying back the short call is ofset by 2
> > positions (long call and short put)
> > in addition. the premium collected (on avrage )is 400*12=4800
> > 4800/3500 is over 100%per year
> > the comm is aprox 20 per
> > (use fidelity)on line
> > warm regards
> > Ben
>
> Ben,
>
> This is the best feature of open net trading forums. Keeps your
> brain fresh. I often think of a new idea while monitoring the
> conversations, or participating in a thread.I often see
> something I never would have thought of, and it sets
> my brain along different lines.
>
> In your analysis above, are you also computing the amount of
> money you are tying up in margin and risk? This has to be
> calculated in before you can calc the true return per dollar
> invested.
>
> Of course, the bottom line is expanding equity! If it makes money
> for you and you are comfortable with it, that is all that matters.
>
> Regards,
> Walt
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