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Hmm. I
thought I did post them as GIF's but here they are again.
<FONT face=Arial color=#0000ff
size=2>
Good
luck and good trading,
<FONT face=Arial color=#0000ff
size=2>
Ray
Raffurty
<FONT face=Arial color=#0000ff
size=2>
<FONT face=Arial color=#0000ff
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<FONT face=Tahoma
size=2>-----Original Message-----From: Alex Bell
[mailto:alex_bell@xxxxxxx]Sent: Friday, February 13, 2004 4:44
PMTo: Raymond RaffurtySubject: Re: [RT] Calendar
SpreadsHello Ray,Thanks for the post but
I can not open attachment winmail.dat Can youplease re-post attached
chart(s) as a .gif e.g.?Best
regards,Alex
mailto:alex_bell@xxxxxxxThursday, February 12, 2004, 2:41:14 AM, you
wrote:RR> Hi Rt's,RR> I have recently been exploring
calendar spreads using stocks other than theRR> QQQ (and similar
vehicles). In case someone does not know a calendar spreadRR> is buying a
distant expiration call (or put) option, often a LEAP, andRR> selling a
closer expiration call (or put) at the same strike or higher forRR> calls
(lower for puts). The idea is that the LEAP acts as a low costRR>
substitute for owning the underlying stock, while the short option
generatesRR> cash.RR> I started by looking for stocks with low
cost Jan. '06 LEAPS and relativeRR> high calls expiring in Sept
'04. One that immediately popped up isRR> Bristol-Myers Squibb
(BMY) currently trading at $30.05 per share. The BMYRR> Jan '06 30
Call (WBMAF) is bid at $3.70 or $370.00 per contract. The
BMYRR> SEP 2004 32.5 Call (BMYIZ) ask is $1.05 or $105.00 per
contract. This meansRR> that if one where to buy 1 WBMAF and sell 1
BMYIZ the net cost would be $370RR> - 105 = $265.00 per
contract.RR> As you can see from the attached chart this produces a very
favorableRR> risk/reward profile. Trading 5 contracts of each call
the maximum lossRR> would be $1325.00 while the maximum profit would be
$2195.00 and theRR> position would be profitable any ware with BMY
trading between $24.32 andRR> $59.18.RR> Comments
anyone?RR> Good luck and good trading,RR> Ray Raffurty
RR> Yahoo! Groups Links
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