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Re: alan81 post# 18312

Thursday, 11/20/2003 9:31:35 PM

Thursday, November 20, 2003 9:31:35 PM

Post# of 97755
Alan,

Look up "synthetic stock".

Modulo noise (differences in options vs. stock comissions) it behaves exactly as the stock does for the life of the position, at which point you may sell it, and restablish something similar.

Basically, choose the closest strike to the current price, pick an expiration date, sell the put, use proceeds to buy the call, keep margin requirement in an interest-bearing money-market.

It has the same return as buying the stock, hence the name.

Doug
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