Thursday, September 17, 2009

[TheOptionClub.com] Re: Can I Do This?

 

Hi Jeff, while Chris has provided a clear response, I am still wondering what made you say that if you were able to do this, your loss would be 0.48 (and not 0.61) no matter what happens. Am I missing something here?

Based on my limited knowledge, the only way to "lock-in" a loss would be to get into a box but for that purpose, you would have to short the 44/45 put spread.

Cheers Viky

--- In OptionClub@yahoogroups.com, "Chris" <chris@...> wrote:
>
> Jeff,
>
> I don't know if you're crazy, but you're not appreciating the full
> picture. If you buy the 44 call you will have closed out your short
> call position. If you sell a 45 call you will close out your long call
> position. My guess is that you're thinking you can simultaneously be
> long a 45 call and short a 45 call in the same account. Even if you
> could, your two positions would cancel each other out. Whether you want
> to realize your .61 loss or not, it really is there and no amount of
> creative thinking or wishing will make it disappear.
>
> Christopher Smith
> TheOptionClub.com
>
> --- In OptionClub@yahoogroups.com, "JeffreyW" <jeff@> wrote:
> >
> > I have a SEP Bear Call Spread on JPM at 44/45. As of this moment, the
> 44 is ITM (JPM 44.65).
> >
> > Just asking, but is there any reason why I cannot buy back the 44 and
> sell a 45? I would then have a 45/45. If I just closed this I would take
> a loss of .61, but if I did the above, my loss would be .48 no matter
> what the price does today or tomorrow.
> >
> > Am I crazy?
> >
> > - Jeff
> >
>

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