[realtraders] R credit spreads(puts and calls at same time) {03}

[Proffittak@xxxxxxx]

In a message dated 11/29/99 10:55:59 AM Eastern Standard Time, fritz@xxxxxxxx 
writes:

<< Ben wrote:
 > an  easy way  to do this is what i do all year
 > i sell   DEC   825 oex calls and buy  DEC  830 calls
 > i sell   DEC   700puts and buy  DEC  695 puts
 > on a 250000  mutual  funds portfolio  i do  30  per month
 > and   never have to worry
 > (Max loss  is   15 times  500   minus  premium  collected)
 > this  works   9  month out of   12
 
 Sounds good!  Could Ben or someone else clarify this, in teensy tiny 
 words, for those of us without a lot of options background?
 
 Ben said he puts on a spread 5% above/below current prices.  But 825 
 and 700 looks more like about 8.6% above/below the center price of 
 760 or so?
 
 What do you mean by "on a 250k portfolio you do 30 per month" -- do 
 you mean it takes $250k/30=$8333 to put on one of these spreads, so 
 you do 30 of them in your account?  (What about the premium 
 collected?)  Or are there 30 different opportunities that arise each 
 month?
 
 What is the expected gain from this 4-step spread?  In another note 
 Ben said he "looks for $3000" -- so do you make $3000 in 9 months, 
 and lose 15*$500 = $7500 in the other 3 months?  What situations 
 cause the $7500 loss?
 
 Thanks,
 Gary
 
  >>
hi

The numbers used was just  an example!!
The margin required  is  10000 plus  amount  of  options  timer spread  
risk($5),,
So   if you have 100000   you can make  monthly  when vix is low 4500
and when vix is hi  9000,,

You must put the order as a  credit spread!!!

You must put both put and calls at same time!!!

(if you try to sell  one without the other  you risk BIG  losses)
my   5 plus history  of transactions shows   9 good trades per year and 3 
losses per year

When i ws talking about making  3000  it is for each 10  puts and 10 calls 
sold.
(aprox spread for each is $1.5)
hope this helps
Ben