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Being short the futures sounds like something that would itself need some
insurance (hedging) unless you are awfully sure of a DOW crash. And if you
are sure of that, why hold the stocks?
Why not write covered calls?
-----Original Message-----
From: Earl Adamy <eadamy@xxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Saturday, May 22, 1999 7:47 AM
Subject: Re: OPTN - DOW Crash Insurance
>Since you will continue to hold the original portfolio, you appear to be
>assuming that any decline in price will eventually be fully recovered.
Given
>this assumption, hedging by shorting futures contracts should offer
superior
>returns to buying puts. In buying puts you will be paying for the
insurance.
>In selling futures you would be collecting the net decrease in premium
which
>is roughly equivalent to a shade over the yield on tbills. This type of
>hedging can be performed for several different equity indexes, bonds,
>Nikkei, etc.
>
>Earl
>
>----- Original Message -----
>From: <DPritch901@xxxxxxx>
>To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
>Sent: Friday, May 21, 1999 10:45 PM
>Subject: Re: OPTN - DOW Crash Insurance
>
>
>> WHAT OTHER LEAP OPTION IS AVAILABLE AND TRADLABE AT A FAIR PRICE IE
>> PUTS DON
>
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