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Especially in the indexes,
----- Original Message -----
From: "Jacobson, Alex" <AJacobson@xxxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Monday, January 06, 2003 10:37 AM
Subject: RE: [RT] Zero Premium Vertical Diagonal Puts
> In any zero premium spread the risk is almost always from early exercise.
> Which is a material risk. In effect your are financing the risk of early
> exercise. You don't get to do an offsetting exercise until the next day
when
> it may be(and often is) too late.
>
> -----Original Message-----
> From: John Cappello [mailto:jvc689@xxxxxxx]
> Sent: Wednesday, January 01, 2003 11:49 AM
> To: Realtraders@xxxxxxxxxxxxxxx
> Cc: MedianLine@xxxxxxxxxxxxxxxx
> Subject: [RT] Zero Premium Vertical Diagonal Puts
>
>
>
> At one time there was a poster on these lists who was banned for his
> lengthy controversial ridiculing of others. His claim to fame was
> Zero Premium Vertical Diagonal Puts as I later found out. Plus he was
> always "calmly" making money while all of us were stressed out and
> with closed minds.
>
> He claimed that if the difference were only 2 to 3% the risk of loss
> is low and the probability of gain is high. He also espoused adding
> spreads as the prices changed.This explanation and my investigation
> is by no means comprehensive...
>
> I followed it for 2 months and was not impressed which may not have
> been long enough. Any one else have any experience with these and
> what has your impression been.
>
> They can also be termed zero premium calendar put spreads as I saw
> from the literature. I believe the above unnamed person created his
> own name for this method.
>
> Any ideas,
>
> John
>
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