Re: [RT] This Week's Most Unusual Covered Call

["Ray Raffurty" <r.raffurty@xxxxxxxx>]

Hi John,
 
This trade has me bothered, it should not 
happen.  See the attached chart.  I'm wondering if it is for 100 
shares.  C has been very acquisitive lately and it is possible that CCC 
includes additional shares from an acquisition.  I checked the CBOE <A 
href="">http://www.cboe.com/search/searchSite.asp?adhoc=true&word=Citigroup%202003 site 
and could not find a smoking gun that would explain this but I think you should 
investigate it further with your broker.
 
The CCC is a correct symbol for calls 
representing 100 shares at $15 and I would expect to see nonconforming 
contracts to have a symbol like CLTCC but mistakes do happen.  I hope I'm 
wrong, but if I'm correct, you are not fully covered and you will be 
exercised.  In that case you would be short the difference in shares.  
You would then need to buy the shares to cover the short.  Of course you 
can buy the shares now to be fully covered but that will screw your $2 
profit.
 
Again I hope I'm wrong but I've seen it happen 
before.  Let me know because it could be a great trade and we should all 
get some of it.
 
Good luck and good trading,
 
Ray Raffurty
 
<BLOCKQUOTE 
>
  ----- Original Message ----- 
  <DIV 
  >From: 
  John Cappello 
  To: <A title=Realtraders@xxxxxxxxxxxxxxx 
  href="">Realtraders@xxxxxxxxxxxxxxx 
  
  Cc: <A title=MedianLine@xxxxxxxxxxxxxxx 
  href="">MedianLine@xxxxxxxxxxxxxxx 
  Sent: Saturday, March 08, 2003 12:02 
  AM
  Subject: [RT] This Week's Most Unusual 
  Covered Call
  I have not seen this before most likely because I was 
  not looking. But this week I was checking out price discrepancies between 
  Calls and underlying price of stock.I found Citigroup [C] traded 
  around $33.90 and the Mar. Call with a strike price of $15 had a bid of 
  $20.90.[makes my cost $33.90-$20.90=$13. I sold the Call first and then 
  bought the stock. The net effect is that if C does not tumble from $33 to 
  under $15 in 10 days, I will effectively make $2 per share when I am 
  called out on 3/21/03.Just thought I would share this technique with 
  you. If the option were further out, I do not think I would have done 
  it.JohnTo 
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