Option Trading Articles: RE: [TheOptionClub.com] WILL THIS WORK?

Tuesday, June 2, 2009

RE: [TheOptionClub.com] WILL THIS WORK?

If you sell the put and the call you cannot exercise either option. If it's
European options and the call is exercised, that means the put would have
expired worthless.

Will it work? Synthetically this position is simply short two 90 puts (naked
or unhedged). It will work if the stock goes up or stays above the 90
strike less the net premium received on the short options.

-----Original Message-----
From: OptionClub@yahoogroups.com [mailto:OptionClub@yahoogroups.com] On
Behalf Of paul7313
Sent: Tuesday, June 02, 2009 7:09 PM
To: OptionClub@yahoogroups.com
Subject: [TheOptionClub.com] WILL THIS WORK?

stock trading at 100
sell a put and a call at 90
if the call is exorcised, exercise the put (european)

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The goal of TheOptionClub is to provide a forum for members to work together for the purpose of furthering our individual understanding option trading. All messages and postings, and any materials circulated are provided for discussion and educational purposes only. No statement contained in any materials from TheOptionClub should be considered a recommendation to buy or sell a security or to provide investment, legal or tax advice. All investors are encouraged to consult a qualified professional before trading in any security. Stock and option trading involves risk and is not suitable for most people. There is no guarantee that any information provided is accurate and, may in fact, be wrong. It is understood that the participants in TheOptionClub have varying backgrounds and degrees of experience in option trading, and that regardless of experience each member is considered a student. As such, any information distributed through TheOptionClub should be considered with a critical mind and not relied upon as an authoritative source.

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