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premsol

premsol
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  • Wednesday Options Update: STI, VLO, UPS & RF [View article]
    Hi Andrew,
    In the Sun Trust Bank trade you describe above, the spread is a debit?
    I calced it out and it seems that a good profit is to made down to the 22 strike then below that the stock would be put to the trader for a heavy discount, being $22 less the intrinsic value of the 24 strike and the sold 22's put premium. A good way to buy wholesale? If the stock was at , say, $20 at exp then the 24 would be $4? So ultimately stock purchase price would be $22 less $4 divided by 2 (puts bought and sold at 2 to 1 ratio) less $0.18 = $19.82 ??
    If stock is above $24 at exp then a $0.06 loss would result as both put would expire worthless ??
    Is my thinking correct. I appreciate your comments. Regards..
    Mar 11, 2010. 03:44 PM | Likes Like |Link to Comment
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