Option Trading Articles: [ConservativeOptionStrategies] Re: if I sell a put and a call at the money

Sunday, May 31, 2009

[ConservativeOptionStrategies] Re: if I sell a put and a call at the money

--- In ConservativeOptionStrategies@yahoogroups.com, "paul7313" <paul7313@...> wrote:
>
> and the market goes up. how do I profit?
>
> or is it better to buy a call and a put ATM? How do I profit?
>
BUY 500 SHARES AT $9.00 ($4500)
> SELL 5 CALLS AT .75 GET $375
> SELL 5 PUTS AT .75 GET $375
> IF AT EXPIRATION: STOCK OVER 9.00
> STOCKS GET ASSIGNED AT 9.00
> YOU GET 4500 FOR STOCK AND 750 FOR OPTION PREMIUMS
> PROFIT 750 MINUS COMM.
> ........
> STOCK BELOW 9 AT EXPIRY
> YOU STILL OWN 500 SHARES
> YOU MUST BUY 500 MORE AT 9.00
> YOU NOW OWN 1000 @9.00 PLUS KEEP 750 FOR PREMIUMS ON THE OPTIONS
> .................