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In a message dated 4/3/99 10:02:25 PM Eastern Daylight Time,
nwinski@xxxxxxxxxxxxxxx writes:
<< HI
> As i menthened to everyone before it is simple
> if you are long sp@ 1300 you buy the 1295put
> this will give you ALWAYS a max loss of $1250
> and a week later when sp500 is 1.6% higher you sell the put at a small
> loss(it has life to 6/18/99).
> hope this helps
> Ben,
Long a futures contract and long a put = long 1 call. Rather than
paying
double commisions,
why not just buy a call for $1,250, as it should be the same result with
lower
transaction costs.
Simply,
Norman >>
good morning all
a call that cost only 1250 will not move $250 for every sp point.
doing it my way is an insurance policy that only reduces risk (even
overnight) on
the long sp with the ability to sell the insurance policy when the long
trend has been established.
In my trading an establish move is when spoos are 1.6% ahead of my buy
price.
so in my example. when i buy sps @1300 and bought the 1295 june put. i
will sell the put when spoos hit 1320.8.
at that point will put the stop loss on the future@xxxx
some days this happen as a day trade!!!!
best regards
Ben
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