|
PureBytes Links
Trading Reference Links
|
----- Original Message -----
From: "Alexander Levitin" <alevitin@xxxxxxxx>
To: <realtraders@xxxxxxxxxxx>
Sent: Monday, January 22, 2001 9:31 PM
Subject: Re: [RT] conservative?
>
> ----- Original Message -----
> From: <MikeSuesserott@xxxxxxxxxxx>
> To: <realtraders@xxxxxxxxxxx>
> Sent: Monday, January 22, 2001 9:14 AM
> Subject: AW: [RT] conservative?
>
>
> >
> > The other point I wanted to bring up - why use a synthetic position at
> all?
> > Suppose your position size was
> > long 1000 shares at 52 1/2,
> > short 10 May 55 calls at 13,
> > long 10 Feb 50 puts at 9 1/2,
> > resulting in a capital outlay of nearly $ 50,000. This capital will not
be
> > available for trading until you unwind your position. Why not use this
> > totally equivalent position:
> > short 10 May 55 calls,
> > long 10 Feb 50 calls,
> > which might be done at nearly even money (if you entered this position
> now,
> > you could even obtain a credit). The capital requirement would be
> determined
> > by the SPAN margin for the position, as of today some $ 23,000 minus the
> > credit of about $ 4,000 which means about $19,000 of your capital bound
in
> > this trade, as compared to almost $ 50,000 for the synthetic variant.
> >
> > Regards,
> >
> > Michael Suesserott
>
> Dear Michael,
>
> The day after you enter into your uncovered short call position, the
> previous boyfriend of your current girl annanced takeover of the company
at
> $1000 per share. What are you going to do then?
>
> Scared Alex.
>
He would probably thank the previous boyfriend and head to the bank with
close to $5000 in his pocket and the girlfriend in his arm. Alex, I guess
you were so scared that you misread what Micheal had written. I don't see
any "uncovered short call position" there.
Regards,
Levent
To unsubscribe from this group, send an email to:
realtraders-unsubscribe@xxxxxxxxxxx
|