re: a strategy for amp ... andalisa
Hi Andalisa ... an unorthodox strategy.
The technical name for your play is a STRADDLE (unorthodox due to use of I/Warrant) and as you say a cost of around $2.00.
As your stated timeframe is the next two months (AMPWOV April Expiry) you need to consider that if AMP expires between $6.50-$7.50 your loss will be around $0.80 ... (allowing for $0.20 ex-div 31/03/03)
Your STRADDLE is currently 'in-the-money' by approx $1.00 leaving the balance $1.00 (time premium) -$0.20 (divvy) as the likely outcome which you have already forecast.
Your breakeven points are $5.70 and $8.30. You need AMP to Expire outside of this range over the next 8 weeks to make a profit.
A spreadsheet BSOPM (as opposed to macro) is complicated involving about a dozen formula's and a goodly amount of 'midnight oil' to setup ... unlikely anyone is going to simply gift it to you.
A spreadsheet BSOPM is contained in "Trading Stock Options and Warrants" by Chris Temby (ISBN 1-876627-58-1) about $35.00 or so.
Cheers ...
This is only my view ... read the red stuff.
AMP Price at posting:
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