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<DIV><FONT color=#000000 size=2>Thanks to those who supplied valuable comments
on my proposed naked put trade scenario. Some of the feedback warned
against the use of naked puts especially because of the potential for loss if
the stock, in this case Netscape, collapsed if the deal failed, or for other
reasons. This is an aknowledged risk, although one can argue that it is a
fairly improbable scenario in this particular deal. But just to make sure
my risk is limited, if I choose to do this trade, I will also be long one
Netscape put for every put that I am short. My long puts will be at one or
two strikes lower than my short puts - in this case my potential maximum loss
will be defined by the delta between the short and long puts. There is a
lesser net premium earned of course because of the cost of the long puts, but it
is still a good deal because of the more expensive Netscape puts. My plan
would be to first purchase the long "insurance puts" at a market
upswing so they are relatively cheap to buy, and then put on the short position
during a down move where they become more expensive (for the
buyers)</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT color=#000000 size=2>Thanks to those who responded to me for all the
valuable feedback</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT color=#000000 size=2>Dan</FONT></DIV></BODY></HTML>
</x-html>From ???@??? Sun Jan 31 16:10:29 1999
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Date: Sun, 31 Jan 1999 16:00:53 -0700
Reply-To: eadamy@xxxxxxxxxx
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From: "Earl Adamy" <eadamy@xxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Re: Options program Update
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-----Original Message-----
From: Ronald McEwan <rmac@xxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Sunday, January 31, 1999 2:21 PM
Subject: Options program Update
>Just to bring everybody up to date on the VB Options Program. I started
>learning to program in Visual Basic to be able to program some of my own
>indicators and market analysis systems in stand alone applications. My
>first project was an options analysis tool kit (Black Scholes Model,
>Binomial Model, Probability Calculator). I thought I had it finished and
>offered a free copy to the Realtraders group. I expected a small response
>of maybe 5 to 10 people. So far in two days it is well over a hundred. I
>then found out that what I thought was a compiled program would not run
>on others pc's. so I went back to the drawing board to figure out how to
>use the VB "Package Application" addin. After I did this then I had to
>zip the file to be able to send it out as one file. I managed to get all
>this done and was still left with another problem. I now had a file that
>was 2.9mb. It takes my slow computer about 20min to email one copy. Much
>to long to respond to everyones request. To solve this problem I am
>trying to find out if the program can be posted on the Realtraders
>Website. Another issue that came up was the fact that I never wrote a
>readme file for the program with installation instructions and program
>explanations. I will work on this next. After all this I will still need
>some user feedback as to the accuracy and realiability of the programs
>calculations. This whole project has been extremely beneficial in terms
>of experience. I have had many response's from individuals in the group
>who are working on similar projects. I have tried to address these
>questions on an individual and group basis. I hope that others will be
>encouraged to pursue their projects and that we will see the results
>posted here. I hope to have all the bugs worked out in a few days and if
>all goes well members will be able to download a workable copy of the
>program from the Realtraders website.
>
>Thanks
>Ron McEwan
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