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Since the real pricing I gave also generated a loss when the market was
flat to down, I would appreciate seeing an example of real pricing at a
time when the concept works...
Regards
DanG
MikeSuesserott@xxxxxxxxxxx wrote:
>
> Hi Ben,
>
> the charts I sent depict the position you first gave, using March and April
> options. If you can indicate the day you entered your actual position (and
> providing I still have the historical data for volatilities etc.), we can
> have a look at that chart, too.
>
> Best regards,
>
> Michael Suesserott
>
> > -----Ursprungliche Nachricht-----
> > Von: profitok [mailto:profitok@xxxxxxxxxxxxx]
> > Gesendet: Tuesday, February 19, 2002 18:56
> > An: realtraders@xxxxxxxxxxxxxxx
> > Betreff: Re: [RT] Selling Covered Calls
> >
> >
> > dear Michael
> > the software you are using has a flow
> > it shows that at 33.9 price I am at a loss
> > this will never happen
> > my principle loss is covered by my long put
> > Ben
> > ----- Original Message -----
> > From: <MikeSuesserott@xxxxxxxxxxx>
> > To: <realtraders@xxxxxxxxxxxxxxx>
> > Sent: Tuesday, February 19, 2002 12:31 PM
> > Subject: [RT] Selling Covered Calls
> >
> >
> > > Ira,
> > >
> > > I am so glad to hear that you were able to retire early (I was,
> > too), and
> > > that you believe you understand options.
> > >
> > > Unfortunately, your analysis is still totally wrong. Ben's original
> > position
> > > is indeed equivalent to a calendar spread, and furthermore, risk is
> > totally
> > > limited here.
> > >
> > > To prove this, please find attached two charts. The first one, ben.gif,
> > > shows Ben's position as originally indicated by him. The second chart
> > shows
> > > the equivalent calendar spread. If you were to superimpose
> > them, you would
> > > find them exactly congruent.
> > >
> > > You may also notice that there is no unlimited risk, and that
> > the greatest
> > > profit potential is to the upside.
> > >
> > > Regards,
> > >
> > > Michael Suesserott
>
>
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