Thread: Alternate Strategies

Originally Posted by FUTURESTRADER

certainly not for everybody...'spend your time before you spend your money'
Just put in an order to sell 4 dec S&P 1150 puts and buy 4 1100 puts. for $.50 each. The spread (1150 - 1100) is 50 points (1150 selling for $1.00 and the 1100 I'm buying for $.50) and the premium I'm trying to collect is $.50 for each of the 4 spreads. That $.50 is multiplied times 250 which represents 250 shares of the Dec S&P 500, which is down 20 pts @12:14 est, @ 1428. My account is only $9149. Comission is $37 per spread. I collect $88 for each spread. x 4 = 352. 352/9149 = 3.84%. So I'm betting (just like insurance companies bet you wont make a claim) that the S&P 500 won't go to 1150 by december expiration, which is december 21st. So it's a race the 1150 AND the 1100 will bothe increase in value as the market drops closer to 1150, but time decay is on my side(the 1100s are insurance for me against the 1150s, without BUYING the 1100s, the 1150s would be 'naked puts')

doesn't look like I'm going to get filled