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Assumptions:
1. bought 1000 qqq at 67.5
2. sold 10 March 67 calls at 5 7/8
3. bought 10 Feb 67 puts at 3 3/8
4. sold 10 Feb 65 puts at 2 (making these naked
puts)
If qqq is at 72.5 on 2/15/01 you'll have (excluding
commissions):
1. $500 loss (bought 1000 at 67.5 and sold
1000 at 67 (assuming option exercise))
2. $5,875 gain
3. $3,375 loss (options expire
worthless)
4. $2,000 gain ($2,000 premium
received)
Net $4,000 gain less
commissions.
On the other hand, if qqq is at 60 on 2/15/01 you'll have
(excluding commissions):
1. $7,500 loss (bought 1000 at 67.5 and sold
1000 at 60)
2. $5,875 gain (options expire
worthless)
3. $3,625 gain ($7,000 gain less $3,375
premium paid)
4. $3,000 loss ($2,000 premium received minus
$5,000 loss)
Net $1,000 loss plus
commissions.
If qqq goes up by 2/15/01, the naked puts expire worthless
and all is well. If qqq goes down by 2/15/01, the naked puts can be very
painful. Given the potential for big swings, the risk may not be worth the
reward.
Chuck
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
<A title=profitok@xxxxxxxxxxxxx
href="mailto:profitok@xxxxxxxxxxxxx";>proffittak
To: <A title=realtraders@xxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxx";>realtraders@xxxxxxxxxxx
Sent: Thursday, January 25, 2001 10:46
AM
Subject: Re: [RT] qqq
position/w/options
hello
there are only 3 things that can happen on
2/15/01
if qqq is at 67.5 i
make $5750 minus the debit of $1375 for
the put protection
if qqq is at 60 i
sell the 67 <A
href="mailto:put@$7000";>put@$7000, buy back the <A
href="mailto:65put@$5000";>65put@$5000 and get to keep
the $5750 for the short calls
and lost $7500 on the
stock.
if it is at 65 then i gain 2000 on
the put and 3750 on the
calls.
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
wavemechanic
To: <A title=realtraders@xxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxx";>realtraders@xxxxxxxxxxx
Sent: Thursday, January 25, 2001 10:14
AM
Subject: Re: [RT] qqq
position/w/options
Assuming that you bought 1000 QQQ, and the options
were done in lots of 10, the attached is the P/L chart with assumed
commissions.
wd
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
<A title=proffittak@xxxxxxx
href="mailto:proffittak@xxxxxxx";>proffittak@xxxxxxx
To: <A title=realtraders@xxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxx";>realtraders@xxxxxxxxxxx
Sent: Thursday, January 25, 2001 8:16
AM
Subject: [RT] qqq
position/w/options
hello
bought qqq @671/2 SOLD MARCH 67 <A
href="mailto:CALLS@x";>CALLS@x 7/8 bought Feb 67 <A
href="mailto:puts@x";>puts@x 3/8 sold Feb 65 <A
href="mailto:puts@x";>puts@x comets welcome Ben
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