bhp goodman and other dangers!!, page-4

re: bhp goodman and other dangers!! ... elie Hi Elie ... copy my post from 06/01/03.

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Subject re: advice from options traders ... duck
Posted 06/01/03 15:01 - 475 reads
Posted by rembrandt
Post #62625 - in reply to msg. #62568
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Hi Duck ... I would consider a SHORT STRANGLE as one near term option ...

Reason: IMHO it is likely BHP will range over the near term between resistence at $10.20 and support at $9.50.

For those with a Margin facility ...

Sell $10.44 Mar03 Calls (BHPTO) at around $0.35.

Watch this pozzie and if BHP continues to weaken towards $9.50 on this news then complete the Short Strangle by:

Sell $9.49 Mar03 Puts (BHPLA) which would then be around $0.30.

This is a roughie as I have not crunched the exact numbers but you get the general idea ... the twist is not opening the second leg necessarily at the same time as the first...

If BHP should bolt in either direction then CLOSE out the dead leg.

This is not a recommendation for a trade but a general view of one possible Option strategy.

Others may be more definitive on this than I or have other workable strategies ...

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Cheers ...


This is only my view ... read the red stuff.